Amazon.com, Inc. (AMZN): Is This Actually That Smart?

But the reason why Microsoft Points and Facebook Credits didn’t work may be much simpler than that.

Just because users are buying content online and in a virtual environment doesn’t mean they want a new currency for making those purchases. We all understand how money works. There’s no conversion we need to make in our minds when we buy something for $5. The problem comes when you have 13,729 Amazon.com, Inc. (NASDAQ:AMZN) Coins and an app costs 599 of those coins and a you can’t figure out much that’s actually costing you or how much dollar amount you’ll have left when you make the purchase.

Think of your credit card points and how skewed the numbers feel when you try to redeem those points for a gift card, cash, or flashlight clock radio. They never seem to add up, and it always feels like a scam. I think Kindle Users will eventually feel the same way as Amazon Coin conversions become more complicated than using real money. A simple 1 to 1 conversion between dollars and virtual currency is the most honest and the least confusing. Anything less just doesn’t add up.

The article Why Amazon Coins Are a Bad Idea originally appeared on Fool.com and is written by Chris Neiger.

Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Facebook. The Motley Fool owns shares of Amazon.com, Facebook, and Microsoft.

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