Amazon will pay $7.25 million to roughly 69,000 Prime members in two Washington, D.C. ZIP codes after the company quietly excluded their neighborhoods from expedited delivery for nearly four years while continuing to charge them full membership prices. The refunds are part of an $8.25 million settlement that also includes $1 million in civil penalties paid to the District, announced Thursday by the office of D.C. Attorney General Brian Schwalb.
The deal resolves a lawsuit the District filed against Amazon in 2024, alleging the company excluded ZIP codes 20019 and 20020 from expedited delivery starting in June 2022, according to NBC4 Washington. Those two ZIP codes sit in Wards 7 and 8, east of the Anacostia River, and residents there kept paying the same $14.99-a-month or $139-a-year Prime price even as their packages slowed to a crawl. Amazon has denied any discriminatory or deceptive practices, telling the station it made the delivery changes to protect driver safety.
Court records detailed just how stark the slowdown became. Before June 2022, more than 72% of Prime packages in Wards 7 and 8 arrived within two days, but that rate collapsed to 24% in ZIP code 20020 and 25% in 20019 by 2023, according to Eric Siegel Law. Meanwhile, the rest of the District held steady at a 74% two-day delivery rate during the same stretch, the firm's account of the case notes.
Branded Trucks Pulled, Deliveries Shifted To Third-Party Carriers
The root of the dispute traces back to an internal decision Amazon made in June 2022 to stop sending its own branded delivery trucks into the two ZIP codes, shifting those routes entirely to third-party carriers like UPS and the U.S. Postal Service. As reported by AP News, Amazon has defended the switch by pointing to specific safety incidents involving its delivery drivers in those neighborhoods. Yet the company kept charging full Prime rates while advertising two-day, one-day, or same-day delivery without disclosing the change.
That gap between promise and performance is what triggered the legal fight. The District's lawsuit, filed under the D.C. Consumer Protection Procedures Act, argued that while companies may adjust operations for safety reasons, they cannot charge full subscription fees while secretly delivering a degraded service. The law requires businesses to disclose operational changes that negatively affect service quality, the attorney general's office said in its original filing.
Resident Sere Mickel became something of a test case for the discrepancy. She told NBC4 Washington that deliveries to her ZIP code often took longer than the promised two days, so she ran her own experiment, sending three copies of the same book to three different addresses. The copy sent to Arlington, Virginia arrived the same day, the one sent to Upper Marlboro, Maryland arrived the next morning, and the copy sent to her own D.C. home took three or four days to show up. Mickel filed a complaint with Schwalb's office, which fed into the broader investigation.
Settlement Covers Nearly Half Of Fees Paid During Exclusion
Under the terms announced, impacted Prime members in the two ZIP codes will receive refunds related to the exclusion period, which ran from June 2022 to April 2026, per the attorney general's office. Eligible customers will be notified of their individual refund amounts in the coming weeks, and the settlement requires Amazon to give real-time disclosures to existing and prospective D.C. customers if operational changes will limit expedited delivery in their ZIP code going forward.
Amazon actually ended the delivery exclusions in April 2026, five months before finalizing the agreement with the attorney general's office. The company continued to provide in-house, Amazon-branded delivery service elsewhere in the District throughout the period in question, even as the two Wards 7 and 8 ZIP codes were routed to outside carriers.
The demographic makeup of the affected area has fueled comparisons to so-called digital redlining. ZIP codes 20019 and 20020 are 85% to 90% Black, with median household incomes of about $58,000, roughly half of D.C.'s overall median, according to Census Reporter data. Community members and local officials have framed the exclusions as a pattern of underinvestment in lower-income, majority-Black neighborhoods.
It is not the first time Amazon has faced this accusation. A 2016 Bloomberg News investigation found the company had excluded predominantly Black ZIP codes in major cities, including D.C., from Prime same-day delivery, a controversy that led Amazon to pledge coverage of all ZIP codes in cities where its same-day program operated and in additional markets as they launched, as noted by Retail Dive. At the time, Amazon had attributed the coverage gaps to warehouse proximity rather than demographics.
Second Major Amazon Settlement For DC In Two Years
This is also the second significant settlement the D.C. attorney general's office has extracted from Amazon in roughly two years. In February 2025, Schwalb's office reached a separate $3.95 million settlement with the company over allegations it used customer tips meant for Amazon Flex drivers to cover base labor costs, according to the Office of the Attorney General, which included $2.45 million in penalties and required clearer tipping disclosures in Amazon's app.
Since January 2023, Schwalb's office has recovered close to $80 million in financial relief and civil penalties for District consumers through its consumer protection enforcement work. The office has said companies must inform customers when operational changes negatively affect the quality of service they're paying for, a principle it has now applied to Amazon twice in two years.
