Evan Schuman's StorefrontBacktalk

That 6 to 10 percent range, by the way, speaks to state and local tax rates. Limiting it to state rates, that seems to range from zero to 7.9 percent.

Beyond the competitive issues, the other strong interest from Amazon is seeing how it can leverage tens of millions of consumers to deliver to Amazon—for free—highly accurate, product-specific real-time pricing across many retailers. Used wisely, that could potentially enable Amazon to underprice just enough to sway sales. And if that enables the company to have slightly lower prices, that additional 5 percent discount starts to look less anemic. Mathematically, it comes to whether the savings from the discount plus the lack of sales tax make the additional wait plus shipping charges a worthwhile trade.

The method Amazon has chosen for this intelligence, though, is not necessarily going to deliver the higher prices sought. The app gives consumers four options to explore an item: type in the name; scan the barcode; photograph the product; or speak the name of the product. To get the price data, location must be activated and—this is where it gets interesting—the price can not be scanned, spoken or photographed. It must be typed into a field by the consumer. There are two problems with that approach. First, it’s a hassle. Second, whether through an inadvertent typo or a malicious falsehood, the price could be meaningfully wrong. Amazon has to trust that with a huge number of people doing this, the numbers will be mostly correct.

Also, Amazon isn’t even incentivising those price submissions, saying on its blog that “in-store price submission and location confirmation are optional,” meaning that the cash bonus happens—or doesn’t—regardless of whether the consumer types in the price.

Still, the idea that Amazon is testing this methodology this week is making some retailers very nervous. One retail IT exec at a very large national chain said he is indeed quite worried about the prospect of his stores being filled with Amazon customers reporting back his prices to a major rival.

“This is using the in-store customers as underpaid, on-the-ground-everywhere intelligence collectors. Amazon will have an instant picture of the price of Sony TVs across the nation and everything else. Imagine a hundred competitive shoppers running around your store, scanning and entering prices of all your merchandise, trying to find the best three deals for their $15 discount and then running off to the next store,” the IT exec—who didn’t want his name used or his chain identified—said. “It will be an army hitting your entire chain in a single day. Tomorrow, the online price rollbacks come around and you are losing business at stores across the nation. Your margins are squeezed on every single item, down to pricing that no longer covers the cost of your distribution network.”

On paper, it’s a valid fear. But in the field, this argument falls apart unless a huge number of consumers are willing to do this routinely. Without much better price incentives, I think this experiment will get old quickly. Please don’t get me wrong, brick and mortars. Amazon may indeed kill many of you, but this particular experiment won’t be the weapon that does it.