Amazon Facing Class Action Over Adding Delivery Fee to Once-Free Whole Foods Deliveries

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Amazon faces a proposed class action that argues the retail giant should have adjusted the cost of a yearly Prime membership accordingly, or offered consumers refunds, after it reversed course on offering free Whole Foods grocery delivery. 

The 16-page lawsuit out of Washington contends that hundreds of thousands, if not millions, of consumers signed up for Prime to take advantage of Amazon’s offer of free two-hour Whole Foods deliveries with a minimum $35 purchase. According to the complaint, Amazon “pulled the rug out from its customers” in October 2021 when it added a $9.95 fee to every Whole Foods delivery order placed via Prime. 

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The case alleges that consumers nationwide have paid $119 per year for a contractual service that Amazon “unfairly terminated.” 

“Amazon’s decision to impose a $9.95 Whole Food delivery fee sparked outrage amongst Amazon Prime members,” the lawsuit reads. 

After announcing the introduction of free two-hour delivery from Whole Foods through Prime in 2018, Amazon increased the cost of a Prime membership from $99 to $119 per year, the suit says. Amid the pandemic, Whole Foods began to see unprecedented demand for online orders, and as a result Amazon had to figure out how to handle the sharp uptick in consumer demand with much of the country ordered to stay at home and socially distanced, the filing relays. 

According to the case, Amazon reported a 70-percent increase in earnings in the first nine months of 2020. The lawsuit states that Amazon disclosed that 200 million people pay for Prime memberships, and that it earned almost $7.6 billion in subscription revenue for the service and others in the first quarter of 2021. 

Despite its record profits in early 2021, Amazon began to roll out a new fee for Whole Foods delivery in six markets that summer, the case says. On September 24, 2021, Amazon announced via email that the new $9.95 Whole Foods delivery fee would go national, according to the suit. 

As the case tells it, Amazon Prime members were “rightfully upset” at the imposition of the new Whole Foods delivery fee. 

“Not only was a contractual benefit that Prime members were entitled to under their $119 membership unilaterally revoked, but Amazon offered no partial refunds to members after modifying the contract,” the lawsuit states. “The ‘changes to your membership’ link provided to Prime members in the September 24, 2021 notification email routed consumers to Amazon Prime’s cancellation policy.” 

Under Amazon’s cancellation policy, the complaint says, a Prime member who wanted to end their membership as a result of this “unfair unilateral contract modification,” but who had used Prime even once during the annual membership period, is not entitled to any membership fee refund whatsoever, even though they paid $119 for the benefit of free Whole Foods delivery. 

“Amazon has engaged in unfair business practices, breached its duty of good faith, and deprived Prime members of the benefit of their bargain,” the case alleges. 

The lawsuit looks to cover all Amazon Prime members in the United States who ordered Whole Foods free delivery and were annual Prime members when the $9.95 fee was introduced on October 25, 2021.