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Amazon’s Alexa unit has historically been unprofitable, losing billions of dollars since its introduction in 2014 — but AI could help turn things around.
According to a Friday Reuters report citing eight sources “with direct knowledge” of Amazon’s plans, including current and former Amazon employees who worked on the voice assistant, Amazon is considering putting a higher AI-powered Alexa behind a subscription paywall.
Amazon is currently working on upgrading the free version of Alexa to one with AI capabilities, per Reuters, and plans to add a higher, subscription level of the voice assistant that can process more complex AI prompts.
The two levels of Alexa are internally known as the “Remarkable Alexa” and the “Classic Alexa.” Sources told Reuters that Amazon has thought about a $5 to $10 per month subscription for “Remarkable Alexa” to differentiate the two.
“Classic Alexa” will remain free, according to the report.
If implemented, the subscription would be the first major reframing of the voice assistant since Amazon introduced it.
Amazon Echo Show 8 previewing new Alexa AI features. Credit: Al Drago/Bloomberg via Getty Images
Amazon’s Echo smart home devices with Alexa have been surprise hits since they launched, but a 2022 BI report showed that even though they’re bestsellers, most of them sold at cost.
Related: Amazon Swaps Plastic Pillows For Paper Shipping Materials
Amazon already previewed a generative AI version of Alexa in September and showed off how the voice assistant could talk with more personality and take in more context.
Amazon stated then that it had sold more than half a billion devices with Alexa and that AI features “will be available to Alexa customers in the U.S. soon.”
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Amazon built its business on customer service, believing everything would fall into place if the company made shopping easy and convenient. Case in point: Their return policy allows customers to return millions of items they don’t want free of charge.
But that return policy is also wildly expensive. In 2021, a record $761 billion of merchandise was returned to retailers, according to the National Retail Federation.
Now Amazon wants its customers to think twice before sending products back. The e-commerce giant has quietly implemented a new policy, charging customers a $1 fee if they return items to a UPS store instead of a Whole Foods, Amazon Fresh, or Kohl’s closer to their address, according to a report in The Information.
Amazon owns Whole Foods and Amazon Fresh, and Kohl’s partners with the company.
Amazon is also warning consumers about “frequently returned” items sold on their site. They recently introduced a badge that tells shoppers to check the product details and customer reviews on items with higher return rates in their product category.

Related: San Francisco Whole Foods Closes To ‘Ensure Safety’ of Employees
The new return fee is the latest in a series of cost-cutting measures implemented by Amazon. Last month, the company announced it would be laying off 9,000 workers, following an earlier round of layoffs last year that saw pink slips handed out to more than 18,000 employees.
While Amazon’s return fees are surprising, they’re not unprecedented. Other retail chains have recently done away with their free online return policy, including Abercrombie & Fitch (which charges $7), American Eagle, Foot Locker, Urban Outfitters, and Zara.
If there is any good news to come out of these new return policies, it’s that they have a positive impact on the environment. Returns cause 16 million metric tons of carbon emissions and up to 5.8 billion pounds of landfill waste in the U.S. each year, according to Optoro.
Less returns mean less waste — even if it may cost you a buck.
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Hoseili 2023 new editionBluetooth Headphones.Bluetooth 5.0 Wireless Earphones in-Ear Stereo Sound Microphone Mini Wireless Earbuds with Headphones and Portable Charging Case for iOS Android PC. XG27
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