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Amazon to pay $61M for pocketing tips promised to drivers

Written by larissa@dayonebrands.com

Amazon told delivery drivers in its Amazon Flex program – and customers who placed orders through Prime Now and AmazonFresh – that 100% of tips would go directly to the drivers. But, for more than two years, Amazon secretly pocketed over $61 million of those tips. Now the Federal Trade Commission will hold Amazon to its promises and Amazon will be returning the entire $61.7 million to Amazon Flex drivers.

What can you learn from this case? 

When advertising, be transparent about material terms. Explain up front important information about pay, tips etc. If you change the nature of the deal, be clear about that, too. Concealing what’s going on can lead to class actions, fines, and investigations. 

Substantiate your claims – express or implied. 

Amazon misled customers and drivers by stating that “100% of tips are passed on to your courier.” How would customers have responded if Amazon had told them the truth: “We take 30% to cover our costs and pass on 70% to your courier”? Like other objective claims about products or price, companies also honor their representations to the public. 

Do you engage in marketing or have an online checkout flow for your products or services? → You may want to hire a marketing lawyer to keep you out of hot water. 

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About The Author Alina Lee

I am a marketing law attorney who helps marketing agencies and companies with marketing departments protect their brands. In my legal career, I’ve worked at two prominent law firms and in-house at two renowned companies. Through my firm, Your Ad Attorney, I provide end-to-end legal counseling for your front-end marketing, online paywalls, and customer service communications. Plus, I provide up front flat rates on a project-by-project basis with clear turnaround times.
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This blog gives general information about marketing law trends and updates. Nothing on this site is meant as legal advice. Each situation differs on a case-by-case basis depending on the facts presented. Providing this information doesn’t create an attorney-client relationship and readers should not act upon this information without seeking legal counsel.