MW Shoppers seeking a tariff refund from retailers are likely out of luck
By Bill Peters
A Costco member is suing for a tariff refund, but experts say proving who owes what would be hard to prove in court
A new lawsuit alleges that Costco owes shoppers refunds for tariffs.
After Costco Wholesale sued the U.S. for tariff refunds, a customer is now suing Costco seeking the same from the retailer, an effort analysts say could be difficult and further complicate the clamor for tariff repayments.
Proving a direct connection between tariffs and price increases would be difficult in court, analysts say, and require a deep dive into competition and minute pricing decisions.
And calculating what, exactly, any retailer might owe its customers would require unpacking the agreements they struck with suppliers and shippers to share the tariff burden. The math could get difficult.
The agreements shoppers make every day when they buy things, in and of themselves, make for an uphill legal battle, said Lee Smith, a former official at the Department of Commerce and an attorney at the law firm Baker Donelson who focuses on international trade.
"The contract with the customer is the price," he said. "There's no further deal with customer. So it's going to be hard to say that the customer didn't agree to pay the price that was set."
The class-action lawsuit, filed on Wednesday in a U.S. District Court in Illinois by Matthew Stockov, a Costco member, argues that Costco $(COST)$ owes shoppers refunds for anything extra they had to pay due to price increases the retailer made to cover the costs of President Donald Trump's emergency-powers tariffs issued last year. The Supreme Court struck down those tariffs last month.
The lawsuit alleges that Costco passed on the costs of those tariffs to customers in the form of price increases, reaping a profit along the way. And it argued that even as Costco, along with scores of other businesses, seeks tariff-related refunds for themselves in court, the consumers who ultimately shouldered those higher prices had no clear recourse.
As the lawsuit noted, the so-called importer of record - or the business actually handling the imports, like a retailer or a company managing shipments for them - is the only party that can get a refund from an improperly applied tariff. But the suit argued that often the importer "simply fronts the cost of the tariff, and is made whole by imposing higher prices on consumers."
"The consumer, for all intents and purposes, pays the tariff," it added.
"This lawsuit seeks to prevent Costco, the third-largest retailer in the world, from double recovery," the suit said. "Costco has made no commitment to return any portion of anticipated tariff refunds to the consumers who bore those costs."
Bloomberg noted that customers have sued companies like FedEx $(FDX)$ and EssilorLuxottica $(ESLOY)$ (FR:EL) for tariff refunds. Smith said that while Costco, as an importer of record, did pay tariffs on some items, the plaintiffs could have a hard time showing that Costco increased prices for specific items. Some products it sells are manufactured by others, and he said it could be difficult to show a direct link between price increases and tariffs.
There were smaller details to consider, he said. Companies like food manufacturers, he said, often import the packaging they use to wrap up their food. Breaking out the tariff costs on different parts of a whole single product could be difficult.
Costco did not immediately respond to a request for comment. But during the company's earnings call last week, management said it was unclear what the tariff refund process might look like, and when refunds might land in corporations' bank accounts, if at all.
CEO Ron Vachris said that in many cases, Costco "didn't pass the full cost onto our members," and said it would use any refunds to lower prices for shoppers.
"As we've done in the past when legal challenges have recovered charges passed on in some form to our members, our commitment will be to find the best way to return this value to our members through lower prices and better values," he said. "We'll be transparent in how we plan to do this if and when we receive any refunds."
Still, he said that the dramatic swings in tariff rates last year, along with tariffs imposed on top of one another, made it difficult to gauge the trade war's exact impact on any one item.
For retailers large and small, the cost of those import taxes, at times, has made it tougher to keep shelves stocked and pushed prices higher for consumers already squeezed by years of inflation. Smaller businesses have been hit harder, as the trade war upends the way products get made and shipped.
The U.S. Court of International Trade said this month that the government would have to issue refunds for the tariffs. U.S. Customs and Border Protection said it was making all efforts to have a streamlined refund process ready for use in 45 days from March 6, according to a Barclays analyst, who said refunds could land in the second quarter. Analysts have said that the estimated $170 billion that has been collected in tariffs is unlikely to be fully repaid.
But how the refund process might play out - for businesses or consumers in or out of court- isn't set in stone. Analysts and businesses have also worried about delays, and said that the Trump administration would be unlikely to roll over as it tries to push ahead with its trade war.
Analysts say more disputes are likely to occur between businesses, as they try to hash out who is owed what when, or if, the tariff refunds arrive.
Rathna Sharad, CEO of e-commerce logistics service FlavorCloud, said any refunds consumers might actually receive would likely be up to the businesses. But she said figuring out a process for issuing those refunds could get difficult.
"Maybe tiny checks? How would they even get it to someone like a consumer?" she said.
-Bill Peters
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March 12, 2026 18:59 ET (22:59 GMT)
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