Amazon has reached a settlement in a federal lawsuit that accused the company of making its Prime membership program confusing and difficult to cancel. As part of the agreement, Amazon will issue $1.5 billion in refunds to eligible customers. The estimated individual payout remains uncertain, as it will depend on how many people file claims for these refunds.
Eligibility for a refund includes those who signed up for a U.S. Prime subscription between June 23, 2019, and June 23, 2023. Additionally, individuals who attempted to cancel a Prime subscription without success or who mistakenly signed up during this timeframe may also qualify for a refund.
The payout amounts are structured in tiers, as determined by the Federal Trade Commission. Prime members who used their benefits infrequently—three times or less over a one-year period—could receive automatic refunds of up to $51. Those who utilized Prime benefits more often might have to submit a refund claim form to secure a refund.
The precise amount each individual will receive hinges on the number of claims, mirroring a similar payout structure seen in other settlements like the Meta privacy agreement, where average payouts were nearly $30.
To inform eligible members, Amazon will notify potential claimants within 30 days through various channels, including email, postal mail, and notices on its websites and app, ensuring that customers are aware of their eligibility and the steps needed to claim their refunds.
This settlement marks a significant move by Amazon to address customer grievances related to its well-known Prime service, potentially leading to improved clarity and user experience for subscribers in the future.