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on 22 November 2013
This isn't a reward scheme. It's a prepayment scheme that gives users up to 10% off. To get 10% off, you'll need to buy 5000 or 10,000 coins which cost £45 and £90 respectively.
Amazon are still paying the full 70% cut to developers, so they're taking that discount out of their own cut (so it's actually pretty generous - they make 30% gross per transaction which makes this a third of their share off).
In return for our up-to 10% cut, Amazon get earlier payment. That means interest on our cash (which isn't going to make up for the 10% any time soon at today's interest rates). They also save on microtransaction processing. Rather than hitting your card each time, they deduct your coins from your account balance. That's pretty efficient. Finally, they know virtual money is spent more easily: competitors have been doing 'prepayment' for years via iTunes vouchers and the like. This is simply puts them on an equal footing (but with us getting 10% off).
The downside is the limited scope for spending the coins. It's for apps and in-app purchases right now. It needs to be extended to cover music & eBooks. The Kindle is much more than just a gaming device so limiting Amazon Coins to just apps is daft.