A consumer commission in Andhra Pradesh has ordered Amazon Retail India Private Limited to refund a customer and pay compensation after finding the e-commerce company guilty of withholding a refund processed by a manufacturer. The Vizianagaram District Consumer Disputes Redressal Commission ruled that e-commerce marketplaces cannot legally retain funds refunded by manufacturers, leaving buyers to repeatedly chase their money.
The commission directed Amazon to return the purchase price of Rs 5,199 for the defective product, pay Rs 5,000 in compensation for mental agony, and cover Rs 5,000 in litigation costs. The platform has been given 45 days from the receipt of the order to comply with the directive.
The ruling stems from a complaint filed under Section 35 of the Consumer Protection Act, 2019, by Vizianagaram resident Ijjada Vivekananda. Vivekananda purchased a pair of EarFun Air Pro 3 Noise Cancellation Earbuds (2023 Model) through Amazon on January 18, 2024, for Rs 5,199. The product, manufactured by Hong Kong-based EarFun Technology Limited and supplied by its Hyderabad agent, came with an 18-month warranty.
Failed Warranty Claims And Manufacturer Refund
After experiencing persistent Bluetooth connectivity issues, Vivekananda contacted both Amazon and the manufacturer for warranty service. While the manufacturer initially confirmed on December 3, 2025, that the earbuds were covered under their lifetime warranty, Vivekananda faced issues when the online portal marked the product as out of warranty.
Following further correspondence, the manufacturer agreed to honor the warranty. Instead of replacing the earbuds, the manufacturer processed a full refund of Rs 5,199 on December 16, 2025, and transferred the amount to Amazon to be passed on to the buyer.
Withheld Funds And Unexplained Reductions
Despite receiving the funds, Amazon did not credit the customer’s account. The company sent emails on January 9 and 10, 2026, reassuring Vivekananda that the refund was underway and asking for his banking details. However, no payment arrived.
On January 29, 2026, Amazon informed the customer that only Rs 4,689.52 had been approved for refund, arbitrarily reducing the amount by more than Rs 500 without providing a reason. Even this reduced amount was never sent. Vivekananda issued a formal legal notice on February 18, 2026, which Amazon received on February 23 but ignored. On March 2, 2026, Amazon sent another email claiming the refund was processed, but the money remained unpaid.
Legal Action And Commission Findings
The commission, led by President R Venkata Nagabhushanam and members B Sridevi and Ashok Kumar Sharma, noted that Amazon failed to appear or contest the allegations despite being served a notice, resulting in an ex-parte proceeding. Consequently, the buyer’s evidence remained entirely undisputed.
Based on invoices and correspondence, the commission confirmed that the manufacturer had successfully transferred the full refund to Amazon in December 2025. The panel ruled that it was obligatory for Amazon to immediately release the funds to the customer upon receipt.
The commission concluded that Amazon’s failure to issue the refund, its conflicting statements, and its arbitrary reduction of the refund amount constituted a clear deficiency of service and an unfair trade practice under the Consumer Protection Act, 2019. The panel added that the platform’s actions had subjected the consumer to unnecessary financial hardship and mental distress.
