Amazon has agreed to a $309 million (approximately ₹25,600 crore) settlement to resolve a major class action lawsuit in the United States over allegations that it improperly denied refunds on returned items. A federal court in Washington state has approved the agreement, clearing the way for payments to millions of customers.
The lawsuit, filed in 2023, accused the e-commerce giant of failing to issue refunds in several cases or recharging customers even after products were returned in accordance with Amazon’s stated return policies. Plaintiffs argued that these practices caused “substantial and unjustified monetary losses” to consumers over multiple years.
The settlement was approved by US District Judge Jamal Whitehead in Seattle and covers customers who made purchases on Amazon dating back to September 2017.
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Who is eligible
The class includes Amazon customers who did not receive a full refund after returning eligible items or who were later charged despite completing the return process. According to court filings, approved claimants are expected to receive the full amount of the refund owed, along with applicable interest.
Lawyers representing the plaintiffs said that when cash refunds, interest and non-cash benefits are combined, the settlement delivers more than $1 billion (around ₹83,000 crore) in total value to consumers.
Amazon denies wrongdoing
In its settlement filing, Amazon denied any wrongdoing. The company maintained that customers agreed to its return terms, which allow charges if items are not returned within specified timelines or if the correct product is not received.
Despite denying liability, Amazon agreed to settle the case to avoid a prolonged legal battle and mounting litigation costs.
In a statement included in court records, an Amazon spokesperson said that an internal review conducted in 2025 identified a limited number of cases where refunds were either issued without the payment being completed or withheld because the company could not verify that the correct item had been returned.
Changes to return and refund systems
Beyond the ₹25,600 crore cash settlement, Amazon has also committed to making operational improvements to its return and refund systems. Court documents indicate that the company has agreed to invest more than $363 million (around ₹30,000 crore) in policy and process changes aimed at reducing refund errors and strengthening item verification mechanisms.
Plaintiffs’ attorneys said these changes are designed to enhance consumer protection and prevent similar disputes in the future.
Under the terms of the agreement, lawyers for the class may seek up to $100 million (approximately ₹8,300 crore) in legal fees, subject to court approval.
Separate Amazon Prime settlement continues
The refund settlement comes at a time when Amazon is already paying out billions of dollars under a separate agreement related to its Amazon Prime subscription practices. In that case, the company was accused of misleading customers into signing up for Prime memberships and making cancellations unnecessarily difficult.
Amazon has also denied wrongdoing in the Prime matter but agreed to a settlement following regulatory scrutiny and consumer complaints.
What happens next
Eligible class members are expected to receive notifications in the coming months outlining the refund process and claim procedures. In some cases, refunds may be issued automatically, while others may require customers to submit or confirm claims, depending on transaction records.
Legal experts say the settlement reflects increasing judicial and regulatory scrutiny of large digital platforms, particularly around automated billing, returns and refund systems.
For Amazon, the agreement marks another significant chapter in a series of high-profile legal disputes linked to its retail and subscription businesses, even as the company continues to defend its broader operating practices.
About the author – Rehan Khan is a law student and legal journalist with a keen interest in cybercrime, digital fraud, and emerging technology laws. He writes on the intersection of law, cybersecurity, and online safety, focusing on developments that impact individuals and institutions in India.
