If you shopped at Costco over the past year, you paid more than you should have. Not because Costco got greedy — because tariffs drove up the cost of nearly everything imported, and much of that cost landed on your receipt.
Then the Supreme Court said those tariffs were illegal.
Now more than $100 billion in refunds is starting to flow. Costco wants its cut. So do FedEx, Lululemon and thousands of other companies. Here’s the question nobody in a corporate legal department wants to answer: What about you?
The Supreme Court killed the tariffs
In February, the Supreme Court ruled 6-3 that President Donald Trump exceeded his authority when he imposed sweeping tariffs under the International Emergency Economic Powers Act. The decision invalidated the “reciprocal” tariffs levied on nearly every U.S. trading partner.
What the court didn’t say: what happens to the hundreds of billions of dollars already collected.
That question fell to the Court of International Trade, which found companies that paid the tariffs are entitled to refunds. U.S. Customs and Border Protection opened an online refund portal in April. The agency estimated 330,000 importers paid about $166 billion on more than 53 million shipments.
Bloomberg Law has reported the refunds could top $130 billion. That’s real money. And it’s headed to corporate bank accounts.
Costco wants its money back
Costco was among the thousands of companies that sued to recover every dollar of tariffs it paid. Smart business. If the government took your money illegally, you’d want it back too.
But here’s where it gets interesting. Costco didn’t eat all those tariff costs. Like most retailers, it passed a chunk of them to shoppers through higher prices. The Federal Reserve Bank of New York found U.S. businesses and consumers bore 86% of the tariff burden, Fox Business reports.
So the people who actually funded a big share of those tariffs? They’re the ones pushing carts through the warehouse.
Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
Shoppers ask: What about us?
In March, an Illinois Costco shopper filed a proposed class action in federal court in Chicago. The suit claims that “Costco is poised to be paid twice for the same unlawful tariff burden” — once from customers through higher prices, and again from the government through refunds.
Lawyers call that theory “double recovery.” A second suit, filed by seven Costco members in federal court in Washington state, makes a similar argument.
And Costco isn’t alone. Lululemon, FedEx, Nintendo and Ray-Ban maker EssilorLuxottica face similar lawsuits from customers, the Sun-Times reports.
Costco’s CEO has said the company intends to pass along any refund value to members through lower prices and better values and promises transparency if refunds arrive. The plaintiffs aren’t buying it. Their suits argue that helps future shoppers — not the specific people who already overpaid.
Don’t hold your breath
Here’s the part you won’t see in the headlines: No court has certified a class. No claims process exists. There’s no form to fill out, no website to visit, no check in the mail.
In May, Costco asked the court to throw out the Illinois case entirely, arguing the tariff-refund theory doesn’t hold up legally. That motion is still pending. These cases could take years — or die tomorrow.
Even if shoppers eventually win, don’t expect a windfall. Class action payouts for individual consumers are typically modest, and proving exactly how much extra you paid on a given rotisserie chicken is nearly impossible. Costco’s CEO himself has noted that layered, constantly changing tariff rates made the impact on individual items hard to track.
Watch your wallet in the meantime
One warning while this plays out: Scammers love a headline like this one.
Anytime billions of dollars and the words “class action” appear in the news together, fake claim-filing websites follow. If someone asks you to pay a fee to “register” for Costco tariff refunds, walk away. There’s nothing to register for. Legitimate class actions never require upfront payment.
Real settlements do exist, of course — we recently showed readers how to get their cut of Amazon’s $1 billion returns settlement. The difference: That one has a court-approved claims process. This one doesn’t. Not yet.
The best move right now costs nothing. Keep shopping smart, and keep an eye on this case. If a settlement or judgment ever creates a real claims process, we’ll tell you — and it’ll be free.
In the meantime, make sure your membership is actually paying for itself. Our guide to whether a Costco membership can save you money is a good place to start. And don’t overlook the things Costco members can get for free.
The tariff refund fight will take years. Overpaying for your membership is a problem you can fix today.
Read the full article here
