Amazon will pay $309 million to settle return policy lawsuit — here's what it means for you

Amazon has agreed to pay $309 million (alongside "other benefits") to affected customers who were incorrectly denied refunds as part of a class action settlement totalling over $1 billion. That's on top of the $2.5 billion settlement with the FTC from late last year that the retailer is also grappling with.

The corporation agreed to this settlement last week and, according to court documents, has already issued $570 million in refunds with around $34 million still to come. An additional $363 million will be put towards improving its return and refund practices, which will also be fed through to affected customers through non‑monetary relief.

“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," an Amazon spokesperson told Reuters.

Amazon failed to acknowledge any wrongdoing, but the settlement stems from two class-action suits that were launched back in 2023, claiming Amazon caused "substantial unjustified monetary losses" to those customers who returned items but never received refunds for them.

Who does this settlement affect?

According to Reuters, this settlement will pay out to:

• U.S. customers who purchased goods on Amazon from September 2017
• Who did not allegedly receive "timely or correct" refunds
• Who were later charged despite returning items

We're not sure at this point how the $309 million will be divvied up, but, as part of the court proceedings, the plaintiffs stated that class members should expect to recover the full amount of any lost funds from incorrect refunds. Plus interest. So the amounts in question will differ for each individual affected.

What's the timeline?

Before payments can proceed, the settlement will need to be approved by U.S. District Judge Jamal Whitehead in Seattle. Since both sides are in agreement, this shouldn't take too long, but it will need to happen before the wheels are in motion.

Anyone eligible for a payout will likely be contacted via email — so if you fall into the affected category, you'll want to keep an eye on your inbox.

This is separate from Amazon's other class action suit, involving the FTC, which is set to pay out up to $51 each to affected customers. This stems from the government agency claiming Amazon tricked customers into signing up for Prime subscriptions and then made it difficult to cancel.

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