A customer of Costco has filed a proposed class action lawsuit seeking to force the retailer to return potential tariff refunds to shoppers who paid higher prices when import duties were imposed. The legal complaint argues that if the company receives refunds from the government after a recent court ruling on tariffs, it should return that money to customers who absorbed the costs through higher retail prices.
The case highlights growing uncertainty surrounding roughly $166bn (£124bn) in tariff refunds that could be owed to companies after the Supreme Court of the United States struck down many tariffs imposed by Donald Trump last month.
Customer Claims Retailer Could Recover Tariff Costs Twice
The lawsuit was filed in federal court in Illinois by customer Matthew Sockov.
Sockov argues that Costco may be able to recover tariff costs both from customers and from government refunds. According to the complaint, the company raised prices to cover tariffs while also seeking repayment from the government after the duties were invalidated.
He claims this situation would amount to unjust enrichment if customers are not reimbursed.
The lawsuit asks the court to require the retailer to refund shoppers who paid higher prices as a result of the tariffs.
Sockov also cited research from Goldman Sachs estimating that consumers absorbed about two-thirds of the tariff costs introduced during Trump’s administration.
In the filing, he argues that consumers affected by those price increases have no direct mechanism to seek compensation.
Tariff Refund Process Still Uncertain
Although the Supreme Court ruling invalidated several tariffs, the process of returning collected duties has not yet begun.
Responsibility for administering the refunds lies with the United States Court of International Trade, which has instructed the government to start returning money to eligible businesses.
However, officials have indicated that the scale of the refunds may create logistical challenges. Importers originally paid the tariffs when goods entered the country, though many companies later passed some of those costs to distributors and consumers through higher prices.
The government recently told the court it requires additional time to prepare a system capable of processing refunds.
Government Requests Time To Build Refund System
The Trump administration said it needs 45 days to create an electronic process to manage the refunds.
In a court filing, Brandon Long said more than 330,000 importers could be eligible to receive refunds as a result of the ruling.
Long said current administrative systems are not designed to handle the scale of the task. Processing the refunds could require extensive manual work that may interfere with the agency’s broader trade enforcement responsibilities.
The tariffs in question were imposed on dozens of countries under the International Emergency Economic Powers Act.
Retailers And Companies Assess Possible Refunds
Costco is among thousands of companies seeking reimbursement for duties they previously paid. The company did not respond to requests for comment regarding the lawsuit.
During a recent earnings call with analysts, Ron Vachris said the company does not yet know whether it will receive any refunds.
Vachris also said the retailer had not passed the full cost of the tariffs on to customers in many cases.
He added that if the company does receive refunds, it intends to determine the best way to return that value to members, potentially through lower prices or improved deals.
Other Firms Face Similar Decisions
Other companies are also preparing for possible refund obligations.
Delivery company FedEx handled tariff payments for many businesses and individuals importing goods.
FedEx has said it plans to return any refunds it receives to the businesses and consumers that originally paid those charges.
The lawsuit against Costco reflects wider questions about how companies will distribute tariff refunds if they receive payments from the government.
Featured image credits: Wikimedia Commons
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