Amazon Introduces Amazon Allowance Feature for Parents and Others

Peter Roesler, President - Web Marketing Pros

By Peter Roesler

President, Web Marketing Pros

amazon_video_smJust like everyone else, more and more young teens are turning to the internet to buy the products and services they need. This can become a problem for parents who worry about getting bank statements with huge charges to online vendors they don’t remember making. A problem that can exacerbated by the systems like Amazon and eBay that make it easy to buy something in just one click. Amazon has released a new service that will allow parents to let their teens shop on Amazon without directly accessing the primary payment method.

Amazon has introduced a service where people can set up Amazon Allowances. Teens between 13 and 17 years old can only receive an Amazon Allowance if they set up accounts and use Allowances with the inclusion of a parent or guardian. For those over 18, the new Amazon feature also allows employers to give to their employees and people can also give to their friends. Essentially, it’s just an easier to use online gift card for teens.

Users can set up a limit of how much they can spend. And there is users can View the details of their outgoing and incoming Allowances, see the next delivery date of the scheduled Allowances, or modify/turn off any Allowances from section of their account one page. Unlike most gift cards, there are no fees required to give, use, or manage Amazon Allowances.

Amazon Allowance is directly added to the Gift Card Balance of the recipient’s account. If the recipient doesn’t have an account, we’ll send him/her an email to set up one. Amazon Allowance can be used instantly to buy what the recipient needs among millions of items on Amazon,like textbooks, dorm supplies, or Kindle eBooks.

“Sending money to family or friends can be a frustrating process,” said Manish Bansal, general manager of gift certificates at Seattle-based Amazon according to media reports. “A lot of early customers are using Amazon Allowances as a way to budget – whether through one-time or recurring allowances. We’re also seeing parents using Amazon Allowances to send money to college kids who need help buying textbooks and dorm essentials.”

The Amazon Allowance feature makes it easier for teens to shop online and that means it’s good for business owners and marketers trying to reach a younger demographic. Listing teen-oriented products on Amazon means that young people can buy what they want without all the hassle usually involved in getting permission and credit cards. Similarly, the system can be used for getting supplies to college students.

If all of this sounds familiar, it may be because Amazon Allowance sounds very similar to the early version of PayPal, though limited only to Amazon. However, since it removes the fees that frustrate many PayPal users, Amazon Allowance may be a better way to send money, so long as the people don’t mind shopping on Amazon.

This program, of course, benefits Amazon greatly who now has people sending money that can best be used on purchases on Amazon. Unlike PayPal, where the money can be transferred to another bank account or removed by ATM, money in an Amazon Allowance is locked in there. According to the Amazon website, “Once an Allowance is added to the recipient’s Gift Card Balance, the Allowance cannot be refunded or cashed-out except as required by law.”

So there are certainly benefits and disadvantages to using the new Amazon Allowance feature. The benefits to the parents of teens (who probably don’t want their kids cashing out their allowance accounts) is slightly larger than for adults who will probably still prefer the freedoms of money sent by PayPal, even if the money isn’t free to send.

For more recent news about e-commerce, read this article on the growth of e-commerce in all industries.

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