Amazon has agreed to pay $309 million to settle a class action over returns, after customers alleged that they kicked off product returns but were wrongly denied refunds—or got hit with charges anyway, Reuters reported.
The plaintiffs’ lawyers told U.S. District Judge Jamal Whitehead the deal delivers more than $1 billion in total value. That includes over $600 million in individual refunds already secured and roughly $363 million in non-monetary fixes meant to tighten Amazon’s return-and-refund machinery.
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To note: The settlement is separate from Amazon’s Federal Trade Commission (FTC) settlement for $2.5 billion, stemming from an antitrust lawsuit the agency filed in 2023 over allegations of tricking customers into Prime subscriptions.
While this suit was also filed in 2023, its class action settlers claimed that Amazon’s system caused “substantial unjustified monetary losses.” Amazon denied misconduct, arguing that customers agreed to its return terms—specifically, that they could be recharged if a return wasn’t completed within the required time window. Reuters reported that the proposed class covers U.S. customers who bought goods on Amazon dating back to September 2017 and didn’t obtain timely or correct refunds, or were later charged despite returning items.
Amazon did not immediately return Sourcing Journal’s request for comment; Reuters reported that a spokesperson for the Seattle-headquartered behemoth said: “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.”
Amazon failed to acknowledge any wrongdoing, though the settlement stems from two 2023 class-action suits that claim Amazon caused “substantial unjustified monetary losses” to customers who returned items but never received refunds.
Reuters reported that class members expect to recover the full amount of any incorrectly denied refund or retrocharge—plus interest, the plaintiffs told the court; as part of the settlement, class attorneys said they would seek up to $100 million in legal fees.
The settlement is structured as a non-reversionary fund—meaning that no portion of the $309.5 million will be returned to Amazon, regardless of the number of claims filed. In a non-reversionary fund, according to the Superior Court of Orange County, all awarded settlement funds are distributed to the class members, rather than some settlements in which unused funds might revert to the defendant.
While the total number of claims filed has not been specified at present, Zigler Law Group interviewed 71 individuals about their experiences during the firm’s initial investigation into Amazon’s practices; since the lawsuit was filed, the Interim Class Counsel has received regular inquiries from hundreds of other affected Amazon customers.
“The evidence obtained by Interim Class Counsel was instrumental to the successful outcome of the litigation,” according to the declaration of Andrew H. Schapiro and Aaron Zigler in support of the plaintiffs’ motion for preliminary approval. “Amazon has committed to changing the practices challenged in the Complaint.”
The suit stems from Amazon’s allegedly hassle-free returns, in which customers either didn’t receive their money back or were charged incorrectly. It’s also part of a larger trend of increased scrutiny on Amazon’s consumer practices; last September, Amazon agreed to a $2.5 billion settlement with the FTC over claims it misled people into signing up for Prime and made it hard to cancel—as landed after the trial started.
Two days after the class action’s settlement was reached, the cloud computing giant cut some 16,000 jobs worldwide, confirmed Jan. 28, as Amazon attempts to streamline bureaucracy and increase (see: invest) efficiency as its AI adoption (see: prioritization) continues.
