Amazon will pay $7.25 million directly to customers in two predominantly Black neighborhoods east of the Anacostia River after the District accused the retail giant of collecting full Prime membership fees while quietly denying residents the delivery service available elsewhere in Washington.
The settlement announced Wednesday resolves a 2024 lawsuit filed by D.C. Attorney General Brian L. Schwalb over Amazon’s treatment of customers in ZIP codes 20019 and 20020. Another $1 million will go to the District as a civil penalty. The settlement covers more than 69,000 people who held paid Prime memberships at any time between June 9, 2022, and April 5, 2026.
“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,” Schwalb said. “Now, we’re putting more than $7 million back in the pockets of people who were taken advantage of.”
The case centered on Amazon’s June 2022 decision to stop using its own delivery network throughout 20019 and 20020. Instead, the company relied on UPS and the U.S. Postal Service for last-mile deliveries. The District’s lawsuit alleged that Amazon knew those carriers often led to slower deliveries but did not inform customers that their ZIP codes had been excluded.
Schwalb said the effect was measurable.
Before the exclusion, more than 73% of packages sent to 20019 and more than 72% sent to 20020 arrived within two days of checkout in 2021. By 2023, those rates had fallen to 25.11% and 23.64%, respectively. Across the District, the two-day delivery rate rose from 66.66% in 2021 to 74.33% in 2023.
Residents paid the same Prime price as customers elsewhere. Since 2022, Amazon has charged $139 annually or $14.99 per month for Prime, a service it has heavily marketed for fast delivery. The District’s complaint noted that Amazon’s own sign-up materials promoted “fast, free delivery” and Same-Day, One-Day, and Two-Day delivery as central membership benefits.
The Attorney General’s Office also alleged that Amazon concealed what was happening when customers noticed the disparity. In one example in the complaint, a customer in ZIP code 20020 asked Amazon why an order took about a week to reach that ZIP code, while the same product could reach nearby ZIP code 20003 the same day. Amazon responded that the difference was “never on purpose.” The District alleged that Amazon had deliberately excluded the customer’s ZIP code from its delivery network.
Amazon said in the settlement that it denies the District’s allegations and admits no wrongdoing. The company ended the delivery exclusions by April 5, 2026.
Schwalb said the money will now go to customers.
Amazon must place $7.25 million into a fund for eligible Prime members. The Attorney General’s Office will determine individual payment amounts, and eligible customers will receive notices explaining how much they are owed and how to receive payment electronically or by check. The settlement requires at least five follow-up notices for customers who do not respond initially.
According to the consent order, eligible residents will receive an equal share of the Prime membership fees they paid during the exclusion period. Amazon must cover administrative expenses separately, so those costs cannot be deducted from the $7.25 million designated for customers. Any funds that ultimately cannot be distributed will go to the District’s Attorney General Restitution Fund.
The agreement also limits how Amazon can make similar decisions in Washington over the next four years. If the company excludes an entire residential ZIP code from its delivery network for safety reasons, it must inform existing Prime members that the decision could affect delivery speeds or other Prime benefits. Prospective customers who enter an affected address during sign-up must receive the same disclosure, and Amazon must notify the Attorney General’s Office.
Those requirements address a central argument in the District’s case. Schwalb’s office did not contend that Amazon lacked authority to protect its drivers. Instead, it argued that the company could not reduce service across entire neighborhoods, continue charging residents the same membership price, and keep the decision from residents.
The original complaint also explained why delivery service matters so much east of the Anacostia. It said residents of 20019 and 20020 live in communities with fewer nearby retail establishments and services, making quick delivery of goods that cannot be easily purchased locally more important.
Hundreds of people responded and reacted to Schwalb’s announcement of the settlement on social media.
“This is good! Amazon has a local facility and it’s shameful how they are treating paying customers,” one person wrote in response to Schwalb’s announcement posted on X, formerly known as Twitter.
Schwalb said the settlement sets a basic requirement for companies that sell services throughout the city.
“No company is above the law, no matter how big or powerful,” he said. “My office will always fight to make sure businesses compete on a level playing field and treat their customers fairly so that D.C. residents get what they pay for, regardless of what zip code they live in.”
