What price ethics? That’s the question our writer Felicity Hannah posed to loveMONEY readers this week when she announced she would stop shopping at Amazon.
She decided to quit following the revelation that Amazon has managed to lower its tax bill this year, despite its pre-tax profits almost trebling.
The news coincides with a terrible year for physical high-street retailers, with big names such as House of Fraser on the verge of closing their doors.
Hannah said she would shop at local retailers instead, claiming “they pay business rates, higher taxes and employ more local people in what I consider to be more sustainable jobs, that purchase benefits my community far more.”
Yet whilst loveMONEY readers were aware of Amazon’s faults, the majority couldn’t resist a bargain:
Here we reveal what readers said, what Amazon is saying and other ways to make your money ethical.
Amazon’s argument
Defending itself, Amazon has claimed that one reason for its low tax bill is a rise in share-based payments to its staff.
Full-time warehouse staff received shares worth more than £1,000 a year.
Furthermore, an Amazon spokesperson noted, "corporation tax is based on profits, not revenues, and our profits have remained low given retail is a highly competitive, low-margin business and our continued heavy investment."
Why readers are sticking with Amazon
Reader PhilofCilcain took a similar argument to many commenters who defended Amazon:
“Amazon pays all the tax they are legally obliged to pay in the UK. If they don't pay what you see as "enough" that is the fault of our law-makers.”
He also pointed out that Amazon provides substantial employment and provide consumers with good value.
Reader RhonaM explained another reason for shopping on Amazon:
“It's a lovely idea to be able to drop Amazon and for absolutely these reasons - however, we live in a village in the highlands of Scotland - a lot of online companies charge a minor mortgage to send things to us - our business relies on stuff getting to us quickly and Amazon delivers (quite literally).”
For her business, she explained, Amazon’s reach – rather than its cheap prices – made it difficult to leave.
Harming small businesses
Not all small business-owning readers were as ready to defend Amazon.
Reader AABBCC_CCBBAA agreed with Amazon’s right to minimise its profits but warned its business model was bad for competition in the long run:
“We run a small online business and for two years were the biggest seller of Timex Kids' watches online in the UK.
“That was until Amazon decided to sell the same and our business dried up overnight. They were selling watches at prices we couldn't even buy them for direct from Timex.”
Other commenters blamed councils’ high business rates for disadvantaging high street retailers, with smaller shops unable to afford lawyers to reduce their own tax bills.
Other ways to shop online
Saving money doesn’t mean you have to shop on Amazon, commented reader Quarket, who suggested using eBay instead:
“You usually get free delivery without jumping through hoops such as Amazon Prime or making your total order up to 20 quid with stuff you don't really want.”
eBAY has had run-ins with the taxman recently, albeit due to suspicions its users aren’t paying enough tax.
Last year a £1,000 allowance was introduced for selling your own products online (read more about the allowance here).
How can I shop ethically?
Whether you shop on Amazon or not, there are other ways to shop ethically.
Morrisons will give you a hefty discount on ‘wonky veg’ that would otherwise be thrown away, whilst Iceland has introduced plastic-free packaging.
For Plastic-Free July we put together a list of practical tips to cut down the amount you buy.
We’ve also written about ethical investment options and ways to make your pension more ethical.
You can read Felicity Hannah's piece on Amazon here and add your views to the polls and comments