Amazon to sell $10 cards for $5 to lure customers

By Barbara Ortutay

Associated Press

Published: Monday, March 19 2012 9:42 a.m. MDT

NEW YORK — Amazon is hoping that five bucks will get you in the door to its local deals site, AmazonLocal.

Amazon.com Inc. will be selling $10 gift cards for $5 on Tuesday to people who visit AmazonLocal.com, the online retailer's answer to deals sites such as Groupon and LivingSocial. It's a crafty move from Amazon, the world's largest online retailer, as it works to distinguish its local deals service from a bevy of competitors.

Mike George, vice president at AmazonLocal, said the company wants to draw in both new and existing customers with the gift card. He said that Amazon hopes gift card buyers will check out the company's offers from spas, restaurants and other businesses on AmazonLocal.

But the gift cards are good for anywhere on Amazon.com, not just AmazonLocal.

Amazon is the biggest online merchant, but the largest deals seller is Groupon Inc., which went public in November and has had the first-comer advantage in the online deals space. Amazon wants to use its retailing might to promote its local business. But Google Inc., the country's dominant search engine, and others are moving into the space too.

Amazon isn't saying how many of the cards it is selling, only that it's available in "limited quantity." Last year, LivingSocial sold about 1.4 million of $10-for-$20 Amazon gift cards. LivingSocial is part owned by Seattle-based Amazon.

Amazon shares dipped 69 cents to $184.36 in late morning trading.

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