Amazon.com Inc. $(AMZN)$ confirmed Friday that it would charge Prime members service fees on Amazon Fresh delivery orders that cost less than $150. The change takes hold on Feb. 28. Orders that exceed $150 will remain free with Prime membership.
Delivery charges will be $3.95 for orders ranging between $100 and $150, Amazon said. But those charges get higher for smaller orders -- $6.95 for orders between $50 and $100, and $9.95 for orders less than $50.
"We're introducing a service fee on some Amazon Fresh delivery orders to help keep prices low in our online and physical grocery stores as we better cover grocery delivery costs and continue to enable offering a consistent, fast, and high-quality delivery experience," an Amazon spokesperson said in an email.
The extra fees will land at a time when customers are already juggling higher grocery prices. Those prices have stayed high as inflation forces more customers to prioritize essential goods.
Amazon, meanwhile, has juggled plans to raise wages, a battle with a warehouse unionization drive, and concerns about faltering e-commerce demand.
Amazon has been building out its Prime service, offering faster deliveries of as little as two hours to Prime customers without a charge. The company has run into profit issues in the past year, however, and has begun to look for ways to cut costs, including laying off 18,000 workers this year.
The company also discontinued its Amazon Smile program, which allowed customers to commit a small percentage of the money they spent to designated nonprofits. That move led DA Davidson analyst Tom Forte to question if Amazon was "losing its soul."
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