Amazon has agreed to a settlement valued at more than $1bn to resolve claims that it failed to properly refund customers for returned items, with court documents showing hundreds of millions of dollars already paid out and further compensation still to come.
Settlement Structure And Payments
Amazon will pay $309.5m into a non reversionary common fund, a pool of money reserved for members of the class action lawsuit. According to court filings, the company has already issued about $570m in refunds to affected customers, with roughly $34m in refunds still outstanding.
In total, more than $600m has either been distributed or is scheduled to be paid directly to consumers, with additional funds expected to be allocated through the settlement process. Reuters first reported on the agreement.
Non Monetary Relief And Process Changes
Beyond direct payments, Amazon has agreed to provide more than $363m in non monetary relief. This includes changes aimed at improving its return handling and refund verification processes, according to the court documents.
Amazon has denied any wrongdoing as part of the settlement.
Claims Behind The Lawsuit
The lawsuit was filed in 2023 and accused Amazon of causing “substantial unjustified monetary losses” by charging customers for items they had returned. Plaintiffs alleged that refunds were either delayed or not issued at all after products were sent back.
In a statement emailed to TechCrunch, Amazon said an internal review conducted in 2025 identified a limited number of problematic returns.
“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 company said.
Amazon added that it began issuing refunds in 2025 and is providing further compensation and refunds to eligible customers under the settlement terms.
Recent Regulatory Settlements
The return refund settlement follows other recent legal actions involving Amazon. Last year, the company agreed to pay $2.5bn to resolve a lawsuit brought by the US Federal Trade Commission over allegations that it tricked users into signing up for Prime subscriptions and made cancellations difficult.
Amazon is currently accepting claims from customers impacted by that settlement.
Featured image credits: Flickr
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