Costco Promises to Pass Tariff Refunds to Members After Supreme Court Ruling

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3.8.2026

Quick Facts

Costco will pass any tariff refunds to members through lower prices after Supreme Court struck down $166 billion in IEEPA duties
CBP needs 45 days to build automated system to process refunds for over 330,000 importers who paid the tariffs
Costco reported strong Q2 results with 9.1% sales growth to $68.24 billion and 14% membership fee increase

Costco CEO Ron Vachris pledged Thursday to return any tariff refunds the company receives to its members through lower prices. The commitment follows a Supreme Court ruling that struck down tariffs imposed under the International Emergency Economic Powers Act.

“As we’ve done in the past, when legal challenges have recovered charges, our commitment will be to find the best way to return this value to our members through lower prices and better values,” Vachris said during the company’s earnings call. “We’ll be transparent in how we plan to do this, if and when we receive any refunds.”

The Supreme Court ruled February 20 that IEEPA does not authorize the president to impose tariffs. The 6-3 decision in Learning Resources, Inc. v. Trump invalidated duties that U.S. Customs and Border Protection had collected on imports.

CBP disclosed it collected about $166 billion in IEEPA tariffs from more than 330,000 importers across 53 million entries. The agency said it needs 45 days to build an automated system to process refunds, compared to a manual process that would require 4 million hours.

The Court of International Trade ordered CBP on March 4 to halt liquidation of IEEPA duties and begin unwinding already-assessed tariffs. Judge Richard K. Eaton ruled that “all importers of record” who paid the duties are entitled to benefit from the Supreme Court decision.

Costco was among the first companies to challenge the tariffs legally. The Issaquah, Washington-based retailer sued the Trump administration in November, seeking a declaration that IEEPA levies were unlawful and requesting a full refund.

Vachris said Costco absorbed significant portions of tariff costs rather than fully passing them to customers. “We always want to be the first to lower prices and the last to raise them,” he said.

The retailer reported strong second-quarter results. Net sales rose 9.1% to $68.24 billion, while net income climbed to $2.04 billion. Membership fees increased 14% to $1.36 billion.

Vachris warned that “the future impact of tariffs remains extremely fluid” as eliminated IEEPA tariffs have been replaced with new global tariffs for at least 150 days. The company has already lowered prices on affected items including textiles, bedding and cookware.

The decision to pass refunds to members aligns with Costco’s membership-centric model and price-first strategy. Rather than treating potential refunds as profit, the approach reinforces value for fee-paying customers at a time when membership income grows faster than merchandise sales.