Costco Faces Potential Class Action Over Tax Refunds
A shopper in Illinois has initiated a class action lawsuit against Costco, seeking tax refunds following the recent rejection of President Trump’s significant import tax.
The legal filing, submitted on Wednesday in a federal court in Illinois, includes claims from Costco member Matthew Stockoff. He purchased various items, like food and electronics, at inflated prices that supposedly included additional customs duties from imported goods.
The lawsuit argues that Costco must offer interest and refunds to U.S. customers since the Supreme Court ruled last month that Trump’s tariffs, enforced under the International Emergency Economic Powers Act, were unlawful.
“While the official importer can seek compensation from the government for these excessive duties, they often act merely as a conduit,” the complaint reads. “Consumers inevitably bear the cost of these tariffs. Even if the Supreme Court invalidates them, the aggrieved consumers lack a straightforward way to seek recourse.”
Costco hasn’t responded to requests for comment regarding the lawsuit.
This wholesale retailer is among numerous companies that filed lawsuits against the federal government last year for tax refunds, though it has yet to commit to refunding its customers.
In a recent earnings call, CEO Ron Vacris suggested that if Costco gets a refund on tariffs, the company would lower prices or enhance value for its members instead of issuing refunds directly.
The lawsuit counters that this assurance is insufficient. It highlights that the prospect of future savings for a vague group of upcoming shoppers does not equate to refunds for previous customers who were charged higher prices.
The Supreme Court’s decision last month indicated that Trump’s tariffs exceeded the authority granted to the president. However, it did not provide clear guidance about how refunds to importers, businesses, or consumers would be handled.
Recently, the International Trade Court directed the federal government to return roughly $166 billion in customs revenue. Still, the specifics of when and how these refunds will be processed remain unclear.
A bipartisan group of senators, including Elizabeth Warren and Cory Booker, has urged the Trump administration to establish a transparent plan for executing tariff refunds.
While consumers aren’t expected to face increased tariffs, multiple companies—including FedEx and United Parcel Service—are facing lawsuits for possible refunds.
FedEx, in particular, had imposed additional charges on its services last year, making refund possibilities clearer. The company has stated that if it receives a tax refund, it will reimburse the shippers and consumers who initially paid those fees.
In contrast, Costco and many other retailers have indicated that they haven’t fully shifted the burden of tariffs onto consumers, making it more challenging to determine expected refund amounts.
