NEW YORK -- Online bookseller Amazon.com will offer customers refunds for all books it has recommended after receiving stinging criticism over the way it handles its editorial endorsements.
The Seattle-based company also promised to tell customers when a publisher pays for a prominent display on its Web site following reports this week that it was offering publishers "cooperative" advertising packages that affected a book's placement on the site.
Paying up to $10,000, a book publisher could get prominent display for a book on Amazon's home page, an author profile or interview and "complete Amazon.com editorial review," the New York Times said. The bookseller also accepted payments for books placed in its "Destined for Greatness" section and its "What We're Reading" list.
Customers were not informed of the payments, a decision that some industry analysts said blurred the line between legitimate book criticism and promotion.
In a statement issued Tuesday, Amazon.com founder and CEO Jeff Bezos defended the company's editorial integrity. He said that no book is praised unless it meets "our standards," and added that "there is no amount of money that would cause us to feature it."
Nicole Vanderbilt, an analyst at the Internet research firm Jupiter Communications, said taking money for product placement isn't unusual. It doesn't differ much from a grocery store that sells prominent shelf space, she said. "It's not because the Safeway thinks Budweiser is a better beer," she said.
Nonetheless Vanderbilt praised Amazon's change of strategy, "They're right in putting the customer first. That differentiates them from most of the other online players."
Several book browsers interviewed Tuesday at a Barnes & Noble bookstore in New York City were dismayed to hear about the advertising deals.
"It surprises me," said Felicia Garcia, an administrative assistant from New York. "It will make me think more about what books I buy."
"It kind of seems a little dirty," said Amy LaPort, an artist.
But Jonathan Shipman, a producer of TV commercials felt differently. "It's just another form of promotion," he said.
Amazon.com's Web site features brief reviews from its staff of editors, and it also invites readers to offer their praise or condemnation and posts their comments for others to read.
Amazon maintains that its editors -- not the advertisers -- have complete control over which books to feature on its site.
As of March 1, Amazon.com will tell customers which displays have been paid for. In addition, the company is offering full refunds for any recommended book..
"It doesn't matter how dog-eared or worn it is," Bezos said. "Even if you ripped out the pages because you thought the book was so bad, you can still return the pieces to us for a full refund."
Previously, the company's returns policy required books to be in unread and new condition.
Amazon has said the cooperative advertising deals are no different than others in the industry in which bookstores are paid to place prominent displays for certain books in the aisles and windows.
Referring to Barnes & Noble and others who charge for display space, Bezos said his company was being "held to a higher standard than physical stores. And you know? That's the way it should be."
Amazon.com's strongest online competitor, Barnesandnoble.com, has said it too will be offering "cooperative" advertising deals for publishers. It has promised to make clear to customers which displays have been paid for.