Amazon's $2.5B Settlement: How to Claim and Why I'm Sticking With Prime

Amazon is paying $2.5 billion to settle Federal Trade Commission (FTC) allegations that it tricked people into signing up for Prime and made canceling too difficult.

Out of that amount:

• $1 billion is going as a civil penalty to the government.
• $1.5 billion is earmarked for refunds to affected Prime members.

Here's what you need to know about the settlement, and why I'm still sticking with Amazon Prime.

What the settlement covers

The FTC alleged two big problems with Amazon's Prime sign-ups:

1. Tricky sign-up flows. Customers were sometimes nudged into Prime during checkout or video streaming without realizing it.
2. Obstructive cancellation. Once enrolled, canceling was buried under layers of confusing screens and, "Are you sure?" prompts.

Amazon hasn't admitted wrongdoing. The company released this statement:

Amazon and our executives have always followed the law and this settlement allows us to move forward and focus on innovating for customers. We work incredibly hard to make it clear and simple for customers to both sign up or cancel their Prime membership, and to offer substantial value for our many millions of loyal Prime members around the world. We will continue to do so, and look forward to what we'll deliver for Prime members in the coming years.

Regardless, Amazon has agreed to the settlement -- which includes paying out $1.5 billion in refunds to customers and overhauling how it presents Prime offers and cancellations.

Who is eligible and how to claim your refund

Refunds are capped at $51 per person, and eligibility mostly depends on when and how you signed up for Prime. Here is the broad criteria:

• You enrolled between June 23, 2019 and June 23, 2025
• You used one of the "challenged" sign-up flows (like checkout or Prime Video)
• You didn't use Prime much, or you struggled to cancel

If that sounds like you, here's what happens next:

• Automatic refunds: Some customers who meet the criteria will see money show up automatically within about 90 days.
• Claim forms: Others will get a notice with a claim form and up to 180 days to submit it online, by email, or by mail.

Amazon is also required to launch a settlement website with step-by-step instructions.

My take: I'm still a Prime fan

I've got to admit that Amazon still makes my everyday life easier. I've canceled and re-joined Prime a few times over the years as my spending habits have shifted. Sometimes the membership didn't make sense for me, but other times the value was undeniable.

This settlement doesn't change the fact that Amazon delivers a ton of convenience to my family right now. If anything, it should encourage the company to keep things clearer and more customer-friendly.

And when you add in the perks I get from using the Prime Visa card (see rates and fees), the benefits outweigh any frustrations I have with their processes.

The Prime Visa still makes a lot of sense

The Prime Visa is a no-brainer for Prime members. I added it to my wallet this summer and it's already paying off big time.

It earns unlimited 5% cash rewards at Amazon.com, Amazon Fresh, Whole Foods Market and on Chase Travel purchases with an eligible Prime membership. Plus 2% cash rewards at gas stations, restaurants, and on local transit and commuting (including rideshare). This stacks nicely on top of the value I already get from Prime.

There's no annual fee (Prime membership is required, however), so I don't have to justify keeping it year after year if my spending drops. And there's a nice welcome bonus upon sign-up: Get a $150 Amazon Gift Card instantly upon approval exclusively for Prime members.

All in all, it's an easy way to squeeze more rewards out of something I'd be paying for anyway.

The bottom line

If you're eligible for a refund, you'll either get it automatically in the next 90 days, or receive a claim form to submit.

File your claim, take the win, and then decide whether Prime still makes sense for you. And if you want to stack even more rewards, grab the Prime Visa and use it for future purchases.