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Amazon customers eligible for refunds are now being notified about how to claim up to $51 back.
In WASHINGTON — The Federal Trade Commission has announced that automatic refunds are being processed this week as part of a $2.5 billion settlement with Amazon.
Those eligible will receive an email from Amazon detailing how to collect their refund via PayPal or Venmo. The refund process, which began on November 12, will continue until December 24. Recipients must accept their refund within 15 days of receiving the notification.
Customers who prefer a physical check, or who do not claim their digital refund within the allotted time, will have a check sent to the default shipping address linked to their Prime account. These checks must be deposited or cashed within 60 days, as stated by the FTC.
This distribution is part of over $1.5 billion that will be returned to consumers following the settlement. The legal action was taken against Amazon due to accusations that the company misled users into signing up for Prime and made it challenging to cancel the subscription.
The settlement comes after Amazon agreed to the payout over alleged violations of a consumer protection law.
How much will Prime customers get?
According to settlement documents posted by the Federal Trade Commission, payouts will be capped at $51.
Prime users won’t need to sign up for these payouts, and they’ll be paid out to qualifying customers sometime before Dec. 24.
Who is eligible for the payouts from Amazon?
Eligible Prime customers include those who may have signed up for a membership via the company’s “Single Page Checkout” between June 23, 2019, and June 23, 2025.
It’s unclear how many people are included in that group, but Amazon gets around 8.8 million orders per day, according to some estimates.
There are a few caveats, however. According to the court order, customers will only be eligible for payment if they tried to cancel their Prime subscription during that timeframe, or signed up for Prime through a “challenged enrollment flow,” which means any of the company’s alternate signup forms, such as the ones through Single Page Checkout or Prime Video.
Customers also have to have used four or fewer “Prime Benefits” within that six-year period. Those benefits include Prime 2-day shipping and access to Amazon Prime Video or Amazon Music.
If the payouts don’t meet the $1 billion threshold given back to customers, the FTC said it would expand the criteria, first to five or fewer benefits, and so on, until at least $1 billion has been distributed to Amazon customers.
Why was Amazon being sued by the FTC?
The Federal Trade Commission sued Amazon in U.S. District Court in Seattle two years ago, alleging more than a decade of legal violations. That included a violation of the Restore Online Shoppers’ Confidence Act, a 2010 law designed to ensure that people know what they’re being charged for online.
Amazon has denied any wrongdoing in the settlement.
Amazon Prime provides subscribers with perks that include faster shipping, video streaming and discounts at Whole Foods for a fee of $139 annually, or $14.99 a month.
It’s a key and growing part of Amazon’s business, with more than 200 million members. The company reported in July that it booked more than $12 billion in net revenue for subscription services, a 12% increase from the same period last year. That figure includes annual and monthly fees associated with Prime memberships, as well as other subscription services such as its music and e-books platforms.
The company has said that it clearly explains Prime’s terms before charging customers, and that it offers simple ways to cancel membership, including by phone, online and by online chat.
“Occasional customer frustrations and mistakes are inevitable — especially for a program as popular as Amazon Prime,” Amazon said in a trial brief filed in August.
But the FTC said Amazon deliberately made it difficult for customers to purchase an item without also subscribing to Prime. In some cases, consumers were presented with a button to complete their transactions — which did not clearly state it would also enroll them in Prime, the agency said.
Getting out of a subscription was often too complicated, and Amazon leadership slowed or rejected changes that would have made canceling easier, according to an FTC complaint.
The Associated Press contributed to this report.
