Ward 7 & 8 Residents to Receive Prime Refunds Under $8.25M Amazon Settlement

Amazon Will Refund $7.25 Million in Prime Membership Fees to Impacted DC Residents and Reform Its Practices

WASHINGTON, DC – Attorney General Brian L. Schwalb today announced that Amazon.com, Inc. (Amazon) will pay $8.25 million in refunds and penalties and change its business practices to resolve the District’s lawsuit alleging that Amazon deceived tens of thousands of DC residents by failing to inform them that their ZIP codes were excluded from Amazon’s in-house delivery services and misleading Prime members about the true cause of shipping delays.

OAG sued Amazon in 2024, alleging that the company had violated DC consumer protection law by secretly excluding two DC ZIP codes east of the Anacostia River (20019 and 20020) from Amazon’s in-house, Amazon-branded delivery services— significantly slowing Prime deliveries to those areas—while continuing to charge tens of thousands of DC residents living there the full Prime subscription price. Now, under the terms of a settlement agreement, impacted District residents will get back nearly half of their total membership fee that they paid during the exclusion period. Amazon will pay back $7.25 million in Prime membership fees and pay $1 million in penalties to the District. Amazon stopped excluding Ward 7 and 8 consumers from full delivery services in April 2026, and this settlement puts safeguards in place to ensure DC customers can make informed decisions about their Prime memberships if Amazon chooses to implement delivery exclusions in the future.

“Amazon deceived thousands of its customers who live East of the River, collecting their Prime membership fees while secretly excluding them from full Prime membership benefits. Now, we’re putting more than $7 million back in the pockets of people who were taken advantage of,” said Attorney General Schwalb. “No company is above the law, no matter how big or powerful. My office will always fight to make sure businesses compete on a level playing field and treat their customers fairly so that DC residents get what they pay for, regardless of what zip code they live in.”


Background on Amazon Prime and Delivery “Exclusions” in Ward 7 and 8 ZIP Codes

Amazon is the world’s largest online retailer. Amazon Prime is the company’s paid membership subscription service, which touts two-day delivery for millions of items sold on Amazon and next-day or same-day delivery for many other items. Since 2022, Prime membership has cost $14.99 a month or $139 per year.

As the District alleged, in June 2022, Amazon made an internal decision to stop using its fleet of Amazon-branded trucks to make Prime deliveries—what it calls a delivery “exclusion”—to two DC ZIP codes east of the Anacostia River (20019 and 20020) for purported safety reasons. Instead, the company chose to service these ZIP codes only with third-party delivery services like UPS and the US Postal Service, which are often slower than its in-house service. Amazon knew these exclusions would result in slower deliveries for tens of thousands of Prime members, yet it never informed existing or prospective Prime members of the delivery exclusions or the impact they would have on Prime’s chief benefit, i.e. delivery speed. Amazon kept these secret exclusions in place for four years.

Because of Amazon’s covert exclusions, approximately 69,000 Prime members living in ZIP codes 20019 and 20020 experienced significantly slower delivery times than their neighbors in other DC ZIP codes, despite paying the same price for Prime membership. When consumers complained of slow delivery, Amazon concealed the exclusion and led customers to believe it was due to other circumstances.  While companies are legally permitted to make operational changes, they are also legally required to inform customers of any adverse impacts those changes will have on the quality of service so that consumers can make informed purchasing decisions.

OAG’s Lawsuit & Settlements with Amazon

OAG filed suit against Amazon in 2024, alleging that the company violated DC’s Consumer Protection Procedures Act (CPPA) by misleading customers about Prime shipping speeds and membership benefits and deceiving consumers about the cause of shipping delays. The CPPA prohibits a broad range of deceptive and unfair business practices, including misleading consumers by failing to disclose important information about products or services. 

Now, under the terms of a settlement agreement resolving the litigation, Amazon will:

  • Pay $8.25 million in refunds to harmed DC residents and penalties.

    • $7.25 million in refunds to Prime members in ZIP codes impacted by delivery exclusions.Eligible customers will be notified of their eligibility and the amount of their refund in the coming weeks.

    • $1 million in penalties to the District.

  • Inform Prime members and OAG of any similar future delivery exclusions in DC. If Amazon excludes any DC residential ZIP code from its in-house, Amazon-branded delivery service for purported safety reasons, the company will provide notice to existing customers—and to any prospective consumers who enter an impacted address during the Prime sign-up process—about the exclusion and the impact the exclusion may have on delivery speed and availability of Prime benefits. Amazon must also notify OAG of any purported safety-based delivery exclusions in the District and provide confirmation that impacted DC consumers have been notified.

The District’s settlement agreement with Amazon is available here.

These matters were handled by Assistant Attorneys General Meryl Grenadier, Samantha Miyahara Hall, Andrew Mendrala, Jorge Bonilla-Lopez, and Ricardo Mullings, paralegal Gustavo Diaz, Data Analyst Aziza Talajawala, former OAG investigator Nicole Jankovitz, Civil Rights & Elder Justice Section Chief Alicia M. Lendon, Deputy Director of the Office of Consumer Protection Emily Holness, and Director of the Office of Consumer Protection Kevin Vermillion.

How to Report Unfair Business Practices

OAG protects DC residents from fraud, exploitation, and deceptive business practices by investigating and mediating consumer complaints, educating residents about their rights, and taking legal action against businesses and individuals that harm residents and break the law. Since January 2023, OAG has obtained nearly $80 million through enforcement actions and settlements on behalf of DC consumers.

To report scams, fraud, or unfair business practices, contact OAG’s Office of Consumer Protection:


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