This would be the last thing I would want to use as a retail store.
1) Customer buys product X from me
2) Payment is processed by Amazon
3) Amazon matches the customer with their own records, sends an advertisement for that same product, at a lower cost
4a) Customer returns product and buys from Amazon
4b) Customer orders from Amazon next time they need it
Edit: For the record, Amazon wouldn't even need to be able to identify the exact products you purchased, enough damage could be done based only on your businesses classification. Technology, clothing, houseware ect.
I'm not so sure about this. Customers already are familiar with purchasing on Amazon. So if anything, Amazon increasing advertising for your product will only increase demand for that product. And that same customer who made the choice to purchase at your store should still purchase at your store since that choice was there to begin with and they already chose your store.
The only difference would be if that customer was not familiar with Amazon's offering prior to purchasing at your store. But only until we get concrete numbers and evidence can we conclude if that number who will be driven to Amazon would balance against the customers who are driven by advertising for more demand towards your store.
Ultimately the difference will be quite nuanced for each individual user. However, if Amazon is able to figure out what the user purchased (whether it's directly provided during checkout, or they're able to identify it by looking at the charge and comparing it to your publicly available inventory online), it would be quiet easy for Amazon to say "Hey, you just purchased X for $100, we have it for $80"
These are people who already have Amazon accounts. If the product was cheaper at Amazon they would have made the purchase there from the start.
There's no way Amazon could lower the price enough to offset the hassle of dealing with a return - not to mention you often have to pay return shipping.
Keep in mind, this is already an Amazon customer. They almost certainly already shop Amazon first.
This is a given before you even start.
If you are using this, it's either because you are selling things Amazon doesn't sell (and despite how large they are, there's a ton of stuff like that). Or you have some kind of advantage over Amazon that they can not match.
If all you are doing is matching, or slightly beating Amazon, you already lost before you even implemented Amazon Pay.
That is terribly kind to Amazon, I'd hold off on presuming every customer, or even a majority of customers always check Amazon first when going to buy items. If that were the case, Amazon would be much much bigger.
1) Customer buys product X from me
2) Payment is processed by Amazon
3) Amazon matches the customer with their own records, sends an advertisement for that same product, at a lower cost
4a) Customer returns product and buys from Amazon
4b) Customer orders from Amazon next time they need it
Edit: For the record, Amazon wouldn't even need to be able to identify the exact products you purchased, enough damage could be done based only on your businesses classification. Technology, clothing, houseware ect.