Electrophysiological studies have utilized event-related brain potentials to study neural processes related to the evaluation of environmental feedback. In particular, the feedback-related negativity (FRN) has been shown to reflect the evaluation of monetary losses and negative performance feedback. Two experiments were conducted to examine whether or not the FRN is sensitive to the magnitude of negative feedback. In both experiments, participants performed simple gambling tasks in which they could receive a range of potential outcomes on each trial. Relative to feedback indicating monetary gain, feedback indicating non-rewards was associated with a FRN in both experiments; however, the magnitude of the FRN did not demonstrate sensitivity to the magnitude of non-reward in either experiment. These data suggest that the FRN reflects the early appraisal of feedback based on a binary classification of good versus bad outcomes. These data are discussed in terms of contemporary theories of the FRN, as well as appraisal processes implicated in emotional processing.