Amazon is selling a service that is sold at, say, CVS. And CVS makes a profit off of that service. CVS gets all of the cash, Amazon ends up with most, but not all, of it. Traditional credit card companies can charge somewhere in the realm of 1-3% or so on transactions, so imagine that CVS retains a similar or lesser cut.
Probably Amazon pays them 0-5% of the recharge amount. That's what they're saving on the credit card processing. Same as buying a Steam gift card at CVS or whatever.
It would be a strategically bad idea if CVS did allow purchases with Amazon bucks. I'm assuming the FAQ is just badly worded, because I couldn't imagine CVS making such an awful strategic blunder. It would be bad for CVS because:
- Amazon would be able to see what CVS customers are buying, for what price and in what combination. That would make it pretty easy for Amazon to pick off CVS customers.
- If a large enough percentage of CVS' sales were settled in Amazon bucks, it would put Amazon in a position where they could 'tax' one of their bigger retail competitors by jacking up 'transaction processing' fees.
You really don't want to be reliant on a wholesale monopolist who also happens to be a retail competitor.
