Refunds Offered on Books Sold by Amazon.com

Amazon.com offered refunds Tuesday for all books it has recommended amid criticism that it charged publishers for book endorsements. The world’s largest online bookseller also promised to tell customers when a publisher has paid for a prominent display on its Web site.

“We did get expressions of concern by people who are very important to us, namely, our customers,” said Bill Curry, a spokesman for the Seattle-based company. He declined to specify how many customers had responded, saying only that it was “more than one.”

Amazon.com has steadfastly denied it sells good reviews to publishers, but newspaper reports this week disclosed that the company was offering publishers what Amazon called “cooperative” advertising packages.

With a payment of 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 reported. The bookseller also accepted payments for books placed in its “Destined for Greatness” section and its “What We’re Reading” list.

Among the advertised books were Stephen King’s “Bag of Bones” and John Grisham’s “The Testament.”

Customers were not informed of the payment arrangement, a decision that some industry analysts said blurred the line between legitimate book criticism and promotion.

Nicole Vanderbilt, an analyst at the New York-based Internet research firm Jupiter Communications, agreed with that assessment Tuesday, but 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.

Vanderbilt praised Amazon’s change of strategy, however, saying: “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 were dismayed to learn of 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 the comments for others to read.

Amazon maintains that its editors--not advertisers--have complete control over which books are featured on its site.

In a statement issued Tuesday, Amazon.com founder and Chief Executive Jeff Bezos defended the company’s editorial integrity. No book is praised unless it meets “our standards,” he said, adding that “there is no amount of money that would cause us to feature it.”

Amazon posted a notice on its Web site Tuesday that says, “Our recommendations are not for sale.”

Amazon has said the cooperative advertising deals are no different from others in the industry in which bookstores receive payments to place certain books in prominent displays in the aisles and windows.

Nonetheless, as of March 1, Amazon.com will tell customers which displays have been paid for.

As for the book refunds to consumers, “it doesn’t matter how dogeared 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.”

The company’s returns policy previously required that all books being returned be in a new, unread condition.

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 to publishers. It has promised to make clear to customers which displays have been paid for.

On a day of sharp stock market declines, Amazon.com shares fell $9.13 to close at $100 on Nasdaq.