Amazon Issues Backdated Refunds in Policy Review
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Amazon.com Inc. customers are suddenly getting refunds for products they purchased and returned as far back as 2018, along with apologies from the online retailer after it discovered “unresolved” issues.
The precise scope of the refunds issued isn’t clear but executives hinted it may be hundreds of millions of dollars. Chief Financial Officer Brian Olsavsky, speaking on a conference call after the company released earnings May 1, said Amazon took a one-time charge of approximately $1.1 billion in the first quarter related in part to “some historical customer returns” that were unresolved. The charge was also attributable to the cost of stockpiling inventory in anticipation of tariffs.
An Amazon spokesperson acknowledged May 20 that refunds are being sent to customers but declined to specify how many or the overall cost. Amazon’s annual revenue in 2024 was $638 billion, making it the second-largest company by revenue behind Walmart Inc.
“Following a recent internal review, we identified a very small subset of returns that were unresolved because we could not verify that the correct item had been sent back to us,” Amazon said in emails to multiple customers, which were reviewed by Bloomberg. “We could have notified these customers more clearly (and earlier) to better understand the status and help us resolve the return. Given the time elapsed, we’ve decided to err on the side of customers and just complete refunds for these returns.”
Amazon ranks No. 1 on the Transport Topics Top 100 list of the largest logistics companies in North America, and No. 1 on the TT Top 50 list of the largest global freight carriers. Walmart ranks No. 1 on the TT Top 100 list of the largest private carriers in North America.
Amazon faces a consumer lawsuit alleging it reversed refunds from customers who followed its returns policy by leaving merchandise at designated kiosks. The company gave customers immediate refunds when items were dropped off, but recharged them full price for the merchandise if it never made it back to an Amazon facility.
The policy was designed to fight fraud in which shoppers buy something and return an empty box or an imposter product seeking a refund — though there are other places in the supply chain where the inventory can go missing. Returns and warranty claims fraud cost U.S. retailers $103 billion in 2024, according to a report by Appriss Retail and Deloitte LLP.
A federal judge in April denied Amazon’s attempts to dismiss the lawsuit, which was originally filed in 2023.
An Amazon spokesperson declined to say if the refunds are related to the lawsuit. “There is no action required from customers to receive the refunds, and we have fixed the payment issue and made process changes to more promptly contact customers about unresolved returns going forward,” the spokesperson said.
Amazon last week nearly $1,800 for a 55-inch smart TV he purchased in 2018, according to screenshots he posted on LinkedIn. “I’m probably not the only customer who has experienced this but isn’t that crazy,” he said. “Seven years to pay out a return.”
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