Amazon Agrees to Pay Over $1 Billion to Settle Returns Refund Lawsuit

Amazon has reached a settlement valued at more than $1 billion to resolve a class-action lawsuit alleging the company failed to properly refund customers for returned items, according to court documents first reported by Reuters.

The settlement includes a $309.5 million payment into a non-reversionary common fund for affected consumers, along with more than $600 million in refunds that have already been issued or are in the process of being paid. Amazon has already distributed approximately $570 million in refunds, with about $34 million still outstanding.

In addition to the cash payments, Amazon has agreed to provide more than $363 million in non-monetary relief to improve its return and refund processes. The company denied any wrongdoing as part of the settlement.

The lawsuit, filed in 2023 in the U.S. District Court for the Western District of Washington, alleged that Amazon caused “substantial unjustified monetary losses” by charging customers for items that were returned but never refunded. Plaintiffs claimed the issue affected customers over multiple years.

Amazon said the issue stemmed from a limited subset of returns. 

In a statement provided to TechCrunch, the company said an internal review conducted in 2025 identified cases where refunds were initiated, but payments did not complete, as well as cases where the company could not verify that the correct item was returned. Amazon said it began issuing refunds last year and is providing additional compensation as part of the settlement.

The agreement is still subject to court approval, though both parties support the settlement.

The returns settlement follows another major legal resolution for Amazon earlier this year. In January, the company agreed to pay $2.5 billion to settle a Federal Trade Commission lawsuit related to Prime enrollment and cancellation practices. That settlement includes direct payments to eligible customers, some of which are automatic, while others require customers to file a claim.

How to File a Claim for the Amazon Returns Settlement

The returns settlement has not yet finalized its claims process, but based on court filings and prior class-action procedures, affected customers should expect the following:

• Eligibility: U.S. customers who returned items to Amazon between September 2017 and the present and allegedly did not receive a timely or correct refund, or were later charged despite returning an item.
• Notification: Eligible class members are expected to be contacted by email once the settlement receives final court approval.
• Claims Process: Details on whether a claim form is required—and how funds will be distributed—have not yet been finalized.
• Expected Outcome: Plaintiffs have stated that customers should recover the full amount of lost funds, plus interest, subject to settlement terms.

Customers can monitor updates by searching for the case name: In re: Amazon Return Policy Litigation, U.S. District Court for the Western District of Washington, No. 2:23-CV-1372-JNW.

For now, no action is required until the court approves the settlement and official claims instructions are issued.