Amazon class action settlement to pay $309M to customers allegedly shortchanged on refunds

Amazon settlement overview:

• Who: Amazon.com Inc. agreed to pay $309 million to settle a class action lawsuit filed by consumers.
• Why: Consumers alleged Amazon shortchanged them on refunds for returned items.
• Where: The Amazon class action lawsuit was filed in Washington federal court.
• How to Make a Claim: Details on how to file a claim were not immediately available. Sign up for our free newsletter to receive claim-filing instructions once they’re available, and check out what settlements are paying out this month.

Amazon.com has agreed to pay $309 million, in addition to approximately $570 million already issued to customers, to resolve a class action lawsuit alleging the e-commerce giant shortchanged customers on refunds for returned items.

Amazon, which denies the allegations of wrongdoing, has issued about $570 million in unpaid refunds as of Dec. 1 and agreed to pay $309 million into a settlement fund for millions of customers who claim they tried to return products but were improperly denied refunds. 

A motion seeking preliminary approval of the Amazon class action settlement was filed on Jan. 23 in Washington federal court.

As part of the proposed agreement, Amazon will also implement changes to its return and refund practices, including regular monitoring to make sure returns are processed within the company’s return policy timelines and providing clearer notifications to customers when refunds are approved or denied, the motion says.

Amazon return policy settlement provides more than $1B in benefits to consumers

The proposed Amazon class action settlement would benefit anyone who initiated the return of a physical product bought through Amazon from Sept. 5, 2017, to the time class data is prepared and who either did not receive a refund, received an incorrect refund or were later improperly charged after a refund was issued, according to the agreement.

“After years of litigation and months of negotiation, the parties have agreed to a resolution of plaintiffs’ claims concerning Amazon’s return policy and refund practices, providing in excess of $1 billion of benefits for the class,” the motion says.

The monetary relief from the Amazon class action settlement will likely represent a full recovery for every class member, plus interest.

The motion comes after U.S. District Judge Jamal N. Whitehead in October stayed the proceedings in light of the parties having reached a tentative resolution.

The court in 2023 merged multiple proposed class actions brought by shoppers who alleged Amazon promised “free, no-hassle returns” but routinely failed to refund customers who had sent back items.

The customers asserted that items are often misidentified or separated while processing refund requests, and that the retailer does not correct these errors because most customers do not notice.

Early this year, Amazon agreed to a $2.5 billion settlement with the Federal Trade Commission to resolve claims that it failed to provide simple mechanisms for consumers to cancel their Prime memberships.

What do you think of the proposed Amazon class action settlement? Join the discussion in the comments!

The Amazon customers are represented by Alicia Cobb, Matthew Hosen, Nolan K. Anderson, Andrew H. Schapiro, Adam Wolfson, Justin C. Griffin and Alyssa G. Olson of Quinn Emanuel Urquhart & Sullivan LLP and Aaron M. Zigler, Lawrence Ashe and Nidya S. Gutierrez of Zigler Law Group LLC.

The Amazon return policy settlement is In re: Amazon Return Policy Litigation, Case No. 2:23-cv-01372, in the U.S. District Court for the Western District of Washington.

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