A Costco customer has filed a proposed class-action lawsuit against the retailer, demanding that potential tariff refunds be returned to shoppers who paid higher prices due to levies. The plaintiff, Matthew Sockov, argues that Costco could receive compensation twice—from customers through elevated pricing and from the government—and seeks a court order for refunds.
Key Takeaways
A Costco customer has filed a class-action lawsuit demanding that the retailer refund customers who paid higher prices due to tariffs. The suit argues that Costco could be unjustly enriched if it receives tariff refunds from the government without passing savings on to shoppers.
- Customer Matthew Sockov sues Costco for potential tariff refunds
- Suit claims Costco could receive double compensation: from customers and the government
- Supreme Court ruling leaves $166bn in tariff refunds up for grabs
- Costco CEO Ron Vachris says any refunds will be used to lower prices or improve values
The legal battle comes amid complexities surrounding roughly $166bn in tariff refunds the US owes to companies after the Supreme Court struck down many of Trump's tariffs last month. The ruling left the refund process to the Court of International Trade, which has ordered the government to start returning money. However, there is significant uncertainty about when and how these refunds will be issued.
Importers initially paid those taxes when bringing goods into the country, with at least some portion of the cost passed on to distributors and customers in the form of higher prices. Sockov's complaint cites a Goldman Sachs report estimating that consumers bore two-thirds of President Trump's new tariff costs. "The truly injured parties possess no direct avenue for redress," he says.
Costco, one of thousands of businesses seeking refunds, did not respond to requests for comment. CEO Ron Vachris told analysts after reporting earnings this month that it remains unclear what refunds, if any, the company will receive. He added that in many cases, Costco had not passed on the full cost of the duties. "As we have 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," Vachris said.
Other firms face similar issues. FedEx, which handled tariffs on behalf of many businesses and individuals, has pledged to refund money it receives to the businesses and consumers that faced tariff charges. Last week, the Trump administration told the court it needed 45 days to create a new electronic process to handle the task, warning that its current systems would otherwise be overwhelmed.
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