Amazon to pay $309.5 million consumer fund in settlement over product returns

Amazon has reached a settlement valued at more than $1 billion to resolve allegations that it failed to properly refund customers who returned products, according to court filings. The agreement includes both direct financial compensation for consumers and commitments to overhaul internal refund and returns processes.

As part of the settlement, Amazon will contribute $309.5 million to a non-reversionary common fund that will be distributed to eligible customers involved in the class-action lawsuit. The fund is structured so that any unused amount will not revert to the company.

Court documents show that Amazon has already issued approximately $570 million in refunds related to the disputed returns, with an additional $34 million still to be paid. The newly established fund is intended to supplement these refunds and address remaining claims. The settlement was first reported by Reuters.

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In addition to cash payments, Amazon has agreed to provide more than $363 million in non-monetary relief. These measures include changes to internal systems, policies, and operational procedures governing how returns are processed and verified. The goal is to reduce refund delays, limit errors, and improve transparency for customers returning items.

The lawsuit, filed in 2023, alleged that Amazon caused financial harm by charging customers for items that were returned but not properly processed. Plaintiffs claimed refunds were either delayed indefinitely or denied after returns were flagged as unverifiable, resulting in cumulative losses running into hundreds of millions of dollars.

Amazon said the issue was identified during an internal review. In a statement shared with TechCrunch, the company said it found a limited number of cases where refunds were initiated but not completed, or where returned items could not be verified. Amazon said it began issuing refunds in such cases in 2025 and maintained that the settlement does not include an admission of wrongdoing.

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The agreement follows increased scrutiny of Amazon’s consumer practices. In 2024, the company agreed to pay $2.5 billion to settle a Federal Trade Commission lawsuit that alleged the use of deceptive design practices to enroll customers in Prime subscriptions and hinder cancellations. Amazon is currently processing claims under that settlement.

Taken together, the cases reflect mounting regulatory and legal pressure on large e-commerce platforms to strengthen consumer protection measures. For customers, the latest settlement is expected to result in additional refunds and clearer procedures for handling returns going forward.