Amazon Agrees to $1B+ Settlement Over Alleged Improper Refunds on Returns

Amazon has agreed to a settlement worth more than $1 billion to resolve allegations that it failed to refund customers for returned items properly. Court documents show the deal includes more than $600 million that has already been paid out or is in the process of being refunded to consumers, along with additional compensation that will be distributed to eligible customers.

As part of the agreement, Amazon will contribute $309.5 million to a non-reversionary common fund reserved for members of the class-action lawsuit. The company has already issued roughly $570 million in refunds, with about $34 million still outstanding. Reuters first reported details of the settlement.

In addition to cash payments, Amazon has committed more than $363 million in non-monetary relief to improve its returns and refund systems, according to the filings. Amazon has denied any wrongdoing in connection with the claims.

The lawsuit, filed in 2023, accused the e-commerce company of causing “substantial unjustified monetary losses” by charging customers for items they had returned.

 Amazon 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. We started issuing refunds in 2025 for these returns and are providing additional compensation and refunds to eligible customers per the settlement agreement.”

The settlement follows other high-profile legal actions involving the company. Last year, Amazon agreed to pay $2.5 billion to resolve a Federal Trade Commission lawsuit accusing it of misleading users into signing up for Prime and making cancellation difficult. Amazon is currently accepting claims from customers affected by that case.