Amazon reaches $1 billion settlement over customer refund lawsuit
Amazon reached a settlement valued at more than $1 billion to resolve a class-action lawsuit claiming the company failed to refund customers for returned items. Filed in 2023, the case alleged substantial unjustified monetary losses for affected consumers. Court documents outline refunds exceeding $600 million already distributed or pending, plus additional payments.
The agreement requires Amazon to deposit $309.5 million into a non-reversionary common fund designated exclusively for class members. This fund ensures the allocated amount remains available for distribution without reverting to Amazon. Prior to the settlement, the company issued approximately $570 million in refunds, leaving about $34 million still outstanding for eligible returns. Reuters first reported details of the settlement.
Beyond cash payments, Amazon committed over $363 million in non-monetary relief aimed at improving its return and refund procedures. These enhancements address operational aspects of processing customer returns. The company explicitly denied any wrongdoing in connection with the allegations.
The 2023 lawsuit centered on instances where consumers returned products but remained charged due to processing issues. Amazon conducted an internal review in 2025 that pinpointed specific problems. In a statement emailed to TechCrunch, Amazon explained: “Following an internal review in 2025, we identified a small subset of returns where we issued a refund without the payment completing, or where we could not verify that the correct item had been sent back to us, so no refund had been issued.”
The statement continued: “We started issuing refunds in 2025 for these returns and are providing additional compensation and refunds to eligible customers per the settlement agreement.” This proactive response followed the review and aligns with settlement terms.
Separately, Amazon paid $2.5 billion last year to settle a Federal Trade Commission lawsuit accusing it of misleading users into Prime subscriptions and complicating cancellations. The company now accepts claims from customers impacted by the returns issue.