Amazon to Pay $8.25M Over Prime Delivery Exclusions in D.C.
Oct 02, 2026Amazon will pay $8.25 million after settling allegations that it stopped using its own delivery network in two D.C. ZIP codes, delivery speeds fell sharply and Prime members were not told about the change.
Amazon routinely uses outside carriers such as UPS and the U.S. Postal Service alongside its own delivery network. The issue in Washington, D.C., began in June 2022, when Amazon stopped using its own delivery network in ZIP codes 20019 and 20020 and relied only on third-party carriers to serve those areas.
The two ZIP codes are in Wards 7 and 8, east of the Anacostia River, in predominantly Black neighborhoods.
Delivery performance fell sharply, while Prime members in the two ZIP codes continued paying the same membership price. The District alleged Amazon did not tell existing or prospective members about the exclusion or how it could affect one of Prime’s most visible benefits.
The Office of the Attorney General for the District of Columbia sued Amazon in 2024. On October 1, Amazon agreed to pay $8.25 million to settle the case, including $7.25 million in Prime membership refunds and $1 million in penalties to the District.
Amazon says the settlement is not an admission of wrongdoing and that it chose to resolve the case rather than continue the litigation.
Delivery Speeds Fell After Amazon Stopped Using Its Own Fleet
Before the change, more than 72% of Prime packages in the two ZIP codes were delivered within two days of checkout in 2021, according to the District’s lawsuit. By 2023, that had fallen to about 25% in ZIP code 20019 and 24% in 20020. Across Washington, D.C., more than 74% of Prime packages were delivered within two days that year.
Amazon continued charging members in the affected ZIP codes the same Prime price as customers elsewhere. Since 2022, Prime has cost $14.99 per month or $139 per year.
The District alleged Amazon knew the change would slow deliveries but did not disclose the exclusion to current members or people signing up for Prime. It also alleged that when customers complained about delays, Amazon did not tell them the delivery exclusion was contributing to the problem.
Amazon says its decision was driven by specific, documented driver-safety concerns. The company has disputed the District’s allegations and maintained that customers could see expected delivery dates when placing their orders.
Amazon restored its own delivery service to the two ZIP codes in April 2026.
$7.25 Million Will Go Back to Prime Members
The settlement covers approximately 69,000 Prime members who lived in the affected ZIP codes during the exclusion period.
Under the agreement:
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$7.25 million will be refunded to affected Prime members. The D.C. Attorney General’s office says eligible members will receive nearly half of the membership fees they paid while their ZIP code was excluded.
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Amazon will pay $1 million in penalties to the District.
Eligible customers will be notified of their refund amount in the coming weeks.
The settlement also sets new disclosure requirements if Amazon makes similar changes in Washington, D.C. If the company removes another residential ZIP code from its own delivery service for safety reasons, it must tell existing Prime members about the exclusion and explain how it could affect delivery speeds and Prime benefits.
People entering an affected address while signing up for Prime must receive notice before joining. Amazon must also notify the D.C. Attorney General’s office.
INSIDER TAKE
This case shows how an operating change can become a membership issue.
Amazon says it changed its delivery network because of specific driver-safety concerns. But members in the affected ZIP codes experienced a significant change in service. Delivery performance declined, the Prime price stayed the same, and the District alleged customers were not told about the exclusion or its effect on delivery.
For subscription and membership operators, the lesson reaches well beyond delivery. When an operating change reduces a paid benefit for part of the customer base, what customers are told about that change becomes part of the decision too.
Customers may never see the carrier strategy, systems or internal decisions behind a service. They do see when the benefit they are paying for changes.
Related Member Resources
Amazon’s settlement shows how an operating change can alter the member experience and eventually become a refund and enforcement issue. These resources help operators see where those changes touch the subscriber relationship and track the risks that can follow when service and member expectations fall out of sync.
- Subscription Lifecycle Operating Map
The map shows how decisions made across the business connect to the subscriber relationship from acquisition through renewal, recovery and cancellation. In this case, it helps operators see how a fulfillment decision can reach beyond delivery and affect member trust and retention.
- Subscription Enforcement, Litigation & Risk Activity Tracker
The tracker follows active subscription-related enforcement and litigation so operators can see the issues drawing regulatory attention. Amazon’s case is a useful example of how a change in a paid benefit, combined with questions about disclosure, can move from an operating decision into a consumer-protection case.
SOURCES
- Office of the Attorney General for the District of Columbia, “Attorney General Schwalb Secures $8.25 Million from Amazon for Secretly Excluding Ward 7 & 8 ZIP Codes from Prime Delivery Services,” October 1, 2026
- Office of the Attorney General for the District of Columbia, “Attorney General Schwalb Sues Amazon for Secretly Excluding Ward 7 & 8 ZIP Codes from Prime Membership Delivery Benefits,” December 4, 2024
- District of Columbia v. Amazon.com, Inc., Complaint, December 2024
- The Washington Post, “D.C., Amazon Settle Lawsuit Over Deliveries to Majority-Black Neighborhoods,” October 1, 2026
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