Amazon Local Register (update)

See our original post: Amazon Local Register – 1.75% Payment Processing Fee.

We previously reviewed the new service that Amazon rolled out called Amazon Local Register. We’d like to correct/add a few points.

Will Everyone Get a 1099k?

We mentioned that the pop-up which Amazon sends you when signing up for Amazon Local seems to indicate that everyone will get a 1099k. However, Ariella and another reader correctly pointed out in the comments that in the Amazon Local “help” section they clearly say that only those who exceed 200 transactions and $20,000 in transactions will get a 1099k. We reached out to Amazon Local via email to double-check this, and they confirmed that no 1099k will be issued unless those two thresholds are met.

Here’s the email:

 

 

Does Amazon Local Combine with Amazon Payments?

Many people use Amazon Payments to send/receive $1,000 per month – $12,000 per year. Will that count toward the 200/$20,000 threshold to trigger a 1099k?

We asked Amazon this question via email, and they replied that since Amazon Local requires a separate account, the numbers do not combine. Unlike an Amazon Payments account which uses your regular Amazon account email/password, Amazon Local requires a new account opened with a separate email address. As such, the two do not combine.

Here’s the email:

 

Accordingly, someone could theoretically open two Amazon Local accounts as two separate businesses, and he’ll be able to do up to 200/$20,000 on each account without triggering the 1099k. I’m obviously not advising this.

Honestly, this won’t make a difference to most of us, because we’ll probably do a few big swipes a month on an Amex gift card or on a new credit card which has a minimum-spend requirement. While we’ll easily hit the $20,000 per year, we likely won’t be doing more than 50-100 swipes over the course of the year. As mentioned, if you don’t meet both 200 transactions and $20,000, no 1099k is issued. The only benifit I could see in opening two Amazon Local accounts would be to try to stay inconspicuous by swiping smaller amounts on each account, but it will may work the other way by creating extra scrutiny for a two-account-holder person.

Does Amazon Local Combine with Amazon-Seller?

As an Amazon seller, I was wondering if my Amazon sales would be combined with my Amazon Local account to trigger a 1099k. This does make a difference (at least to me) because I don’t think I’ll hit the $20,000 threshold on my Amazon sellers account but I may hit the 200 transaction theshold. If the two account would combine, then it may push me over the top.

To this question, too, Amazon replied that it will not be combined, since payments received for selling items on Amazon are not deposited into an Amazon Payments account (they send it directly to a linked bank account).

Here’s the email:

 

So there you have it: Amazon Local runs completely separate from Amazon Payments and from Amazon Seller for the 200/$20,000 threshold.

Is it Against Terms & Conditions?

This part probably won’t interest most of you, but I’m a T&C-guy, so  I was wondering if swiping your own credit card or Amex gift card on the swiper is against any official T&C.

I first searched the Amex gc T&C, and all I could find was that it can’t be used at an ATM; I didn’t see anything written explicitly about using it to receive cash-back from the purchase. (I’m not saying that they couldn’t win the case against you on this, just that I didn’t see it explicitly.)

Then I went to Amazon Local T&C, and there I did find a condition (A-3.2) prohibiting “dispens(ing) cash on any Card transaction”.

 

Seemingly, swiping your own credit card or Amex gc is considered dispensing cash to yourself.

However, they only prohibit such a practice in-as-much as it’s prohibited by Network Rules (“except as permitted by Network Rules”). So until we find in the “Network Rules” (i.e. Visa, Mastercard, Amex, Discover T&C) that it’s prohibited, it shouldn’t be included in this clause.

Happy swiping.