Costco is a rare example of a large company that’s actually pretty well respected for not doing shady things.
I doubt customers have much standing here. They were free to not buy items if they didn’t like the price. And I do believe Costco will use this to lower prices vs just pocketing the money.
> They were free to not buy items if they didn’t like the price.
Customers (had to) accept prices under the assumption that the money went to the government, who are supposed to use it for the public good. You can easily argue that they would not have accepted the same price, knowing that it would benefit a for-profit corporation.
Sure, you could argue that counterfactual, but how is Costco actually implicated? Does Costco have a contract with its members that sets a limit on the margins they can charge? If so, then I suppose they could get sued for breach of contract. If not, as I suspect, then on what grounds could you actually sue them? Just because you feel like a business charges too much doesn't mean you get to sue them.
Did your receipt say anything about a government tariff?
The government was busy telling the hoi polloi that foreign companies were paying the tariff. They fought US companies that wanted to list the tariffs on receipts. They were actively suppressing clarity on the matter to end buyers. Your claim that customers assumed the higher prices was going to the government is specious or simply misinformed.
Wait are you saying that because the Government lied and blocked corporations from exercising freedom of speech and commerce that therefore the government couldn't possibly be seen to be collecting the funds? Your logic is that if the Government lies we are assumed to have believed it and therefore have no recourse. Most people (not all) are nowhere near as dumb as you seem to think they are.
Yes, once I would have agreed. But lately, I'd prefer my money to be going to Costco by far over the us government, and I imagine quite a lot of Costco's members (they are known for being Democrat donors, and a well liked company) feel the same.
Massive caveat that I'm not American, it just seems like public sentiment doesn't broadly think that all the money going to the US government is used for "public good "
> They were free to not buy items if they didn’t like the price
Customers are buying many goods at Costco one might deem as essential (food, toilet paper, etc) in bulk to save on cost. An illegal tax was being collected everywhere and likely at an even higher cost.
Nothing like the 'free to not buy items' argument against a tax illegally levied by the government on most consumer goods.
I think people are missing the forest for the trees here and immediately defending a corporation reflexively. The point here is to try and recover money that was illegally gathered by the government. Costco offloaded the tax burden onto the consumers and now they can collect said taxes back from the government.
Costco does shady things all the time. They just don’t get called out by customers for some weird reason. For example, they often copy some other company’s product blatantly and make it for dirt cheap in places with no labor or environmental laws, and use their retail power to quickly eat into that market. And they’re powerful enough that product manufacturers can’t afford to fight them for stealing designs or IP.
If youve never experienced costco or been a member, this is difficult to understand but there is an undercurrent, nay, a prevailing sentiment of savings value and above all else things like rebate and cash back. Costco has established transparency for the consumer so pocketing the money is an egregious offense for most customers.
- credit cards offered by costco offer generous cashback
- most costco food items include discount pricing thats predictable and visible in the price itself. the decimal value of the price can even determine if the item is being phased out.
- even costco memberships are broken down into savings and the staff will gladly quantify your expenditures and potential cash back should you change or upgrade a membership. unused membership portions are even refunded.
- the refunds. no questions asked, for virtually anything, any time. this is where the costco member expects tariffs to be refunded as well.
I fully expect these to get refunded back to customers.
I occasionally get a gift card in the mail for a product I already purchased from Costco because they negotiated a better price for the batch after the fact.
It's not like Costco told them that. Buying something because a third party misinformed you (or in this case, was only temporarily right) doesn't invalidate the transaction.
You think a seller has some price obligation to you? If they set a price and you pay the price, what they paid for the good is irrelevant unless you had some cost-plus contract that they violated.
If they had listed a line item for tariff fees then I could see the argument and would say that any refunds should go to customers. By not listing a tariff line item, Costco absorbed the additional costs and likely increased prices. In that scenario they, Costco, are the ones that should be entitled to a refund.
This is the same if you walk the chain backwards. Suppliers to Costco that simply raised prices and internally absorbed the tariffs are the ones due a refund, not Costco. Suppliers that sent Costco and invoice with a tariff line item should be on the hook to refund Costco (which means they should be seeking a refund from the US)
Amazon did try to add that line item and the administration pressured them to remove it. And you are making a very big assumption that either Costco or their suppliers absorbed the cost of the tariffs. Because I don't have a link handy, one study I read said more than 80% of the cost of tariffs came from the consumer's pocket, not the supply chain.
Even if that was the case, your infering that customers who paid these fees are not entitled to be refunded when their suing the u.s. government for reimbursement of those collected fees.
If the narrative that u.s. consumers paid inflated prices because of this then the money should go back to the consumers.
I guess Costco suing for a refund means they need to finance that campaign, and Costco consumers can do the same to them; maybe Costco should just drop their claim and let consumers try and recover from the US government...
Costco's position seems pretty unremarkable to me. What % of modern retail sales are both paid in cash, and unconnected to any loyalty/reward program? I'd bet it's under 10%. And even then, a company could refund everyone it knew about, then say "bring in your receipts" for the remainder.
I remember a story on Walmart's data analysis capacity being something like 2 years of line item data for a customer. I've read numbers that suggest 10PB / day ingested from their ecommerce operations and 2-3 PB/hr data processing. Pretty incredible.
For modern ecommerce, figurative recording every twitch of your mouse in their store, I'd believe that.
But to save only the "SKU, qty., unit price, date" receipt info - which you would need to process tariff refunds - that'd be maybe 16 bytes per receipt line? To hit even 1TB/day, you'd need a billion customers, each buying 64 items. On that one day.
As a Costco member and customer, I’d actually trust the leadership more than most companies. Use the tariff money and keep that $1.50 hotdog ~ enough avg Americans can use that break for lunch, even if not the healthiest.
If Costco had miscalculated its tariffs and was on the hook for some additional tax, they wouldn’t be passing it on retroactively. So it is not reasonable to expect any kind of refund either.
I prefer to deal with a company who is making the world a better place rather than a worse one. I don't care whether they like me or not.
I'd rather they did it for good reasons. It makes it more likely that they'll continue to. But they might also do it just to help keep my business, and that suffices.
Are you making reference to the “class action farms” or to Costco here. Because I certainly don’t think class action lawsuits have victims in mind. Source: recipient of a few coupons and $10.00 checks after some “successful” class action.
This would be pretty rare. There's no doubt they get a lot in billable hours, and the pay-out process - if complex - can be expensive, but my understanding is it's typically closer to 20% to the lawyers and maybe 5-8% more in administration. It's definitely a lot but not averaging 50%.
Right! THAT is the “business” with a political position in this case. Not the one seeking a refund on illegal taxes. It doesn’t have to be in my personal best interest for me to think it makes sense for a retailer to seek a tariff refund!
It's pretty easy to see the vast difference in attitudes of Costco employees versus Walmart, etc. It turns out that if you treat people like humans, they'll return the favor. Costco knows this and uses it to everyone's advantage.
If this is your idea of "appealing branding" then call it whatever you need to.
So am I, at least for when it comes to groceries. I can't say the same for other domains.
Unfortunately, experience shows these rare gems are often one generation away from going to shit when the principled types retire and are replaced with backstabbing money grabbers who think the only way to win is in a race to the collective bottom, because "that's what everybody else is doing."
>Their reasons for having higher wages are well-documented and they are equally self-serving.
The bottom line is that they are paying their employees much more than their competitors would. You're going to pass that off as "self-serving"?
Their biggest competitor is owned by a family whose combined net worth is half a trillion dollars that derives from founding a megacorporation worth a trillion dollars....yet for some reason can't find the money to pay their employees a living wage, so they instruct their employees to go on government assistance.
They have a different business model than their competitors.
> You're going to pass that off as "self-serving"?
Yes. Their model allows a few employees to serve many customers in a high-volume system. They have advocated for minimum wage laws increases in the past to deter competitors who have different models.
> yet for some reason can't find the money to pay their employees a living wage
You failed to mention their skin based hiring bonous where leadership is paid a larger bonous for hiring people who match a certain superficial factors.
If thats the right thing and were really in late stage capitalism, I'm extreamly worried about the future.
Personally I think concepts of DEI had a purpose (long before that term existed) and then at some point became gradually less relevant or needed to be adjusted to the point that it was counterproductive in many ways. It was a bandaid hack which ended up creating new problems, sort of like how unions cover for some of capitalism's flaws while creating a new set of problems to contend with.
So on this point I agree with you, but it does not substantially subtract from my overall view of Costco as a company in every other regard. I trust that in time they will revise whatever needs revision in order to be fair to everyone involved. Oddly enough, at least in my area, this doesn't seem to have resulted in a disproportionate amount of one race or another.
One could imagine a scenario where this is a political action group response to defying the administration. I have no evidence to support that, just could imagine it because the potential individual return to customers is minuscule.
wouldnt the average refund come out to basically a free year of membership? the easiest thing for them to do might be just check who was a member during the tariffs, and credit their membership fee for the 'tier' they were buying
people using costco as basically a small-business depot would be lifetime non-transferable free members, and typical family/consumer gets some extra years, which they'll turn around and spend in the store anyway
win/win? costco members are sticky, and refunding cash is hard
This has obviously no merit as clearly Costco didn't "make customers pay" the tariffs. Customers freely accepted an offer to purchase as normally happens whenever someone visits a shop. Either you accept the offer or you don't but how the price is set is irrelevant.
I think that this is a standard play to seek a settlement to make the pain in the backside disappear.
> Customers freely accepted an offer to purchase as normally happens whenever someone visits a shop.
Hear me out on an alternative POV: the government engaged in lawless economic coercion, and the coercion trickled down. If you don't like it, sure, you can always go get coerced somewhere else, it's your free choice. I don't see why anyone would object to that, assuming of course they are a corporation or a government
There is nothing wrong with a taxpayer who paid taxes later ruled illegal filing a request for a refund. This lawsuit is likely a shakedown opportunity for lawyers to enrich themselves. How Costco allocates the money they get back is up to them.
> Instead of reimbursing the customers who paid more for goods, Costco said on a March 2026 earnings call that it plans to use tariff refunds to lower future prices.
> That plan enraged customers who joined Costco based on the proposition that Costco would operate on the slimmest possible margins to ensure they never pay more for goods than Costco can afford to sell them.
I feel like Costco is generally a pretty good company, but this is a wild fantasy when dealing with any commercial entity with a fiduciary responsibility to shareholders.
As a long-time Costco member and very minor shareholder (like 10 shares), lawsuits like this are frustrating. It is in my best interest as both member and shareholder for Costco to relentlessly look for opportunities to reduce costs, including getting credits back from procurement and sourcing. It would be costly to try and determine the tariff impact to every member and then pass it back along. I'd rather see those funds contribute to keeping prices low by offsetting other cost pressures.
Fiduciary duty is fun to define because I’d bet it could be argued both ways here. If you want to consider Costco’s low margins as a core factor as to why consumers choose them, opting for a decision that makes their customer base run off wouldn’t be very responsible to shareholders.
Consider the Target backlash last year. They’re since down 14% vs Walmart (up 30-ish%). Regardless of anyone’s political beliefs, I don’t think a 14% loss seemingly caused by behavior that a segment of customers considered hostile is thinking of the shareholders.
To be really fair, they're being sued by lawyers hoping to take 50% of the proceeds, or 50% of some settlement that they get by shaking down Costco via threats to its reputation.
> this is a wild fantasy when dealing with any commercial entity with a fiduciary responsibility to shareholders.
"Fiduciary duty" is less strict than you'd expect. Courts generally recognize a "business judgment rule," where executives are offered broad discretion in strategy subject to some basic reasonability tests.
This would allow Costco to say "in order to cultivate goodwill and maintain our reputation, after we receive refunds we will distribute them to our customers based on purchased goods with refunded tariffs." It would also allow the directors to book the refund as profits, or use it for later incentives or marketing, or a variety of other actions.
The 'fiduciary duty' aspect here is mostly a myth. Directors do indeed have a fiduciary duty, but that duty is towards the corporation as a whole – including its long-term interests – rather than strictly towards short-term profit maximization. The fiduciary duty doctrine exists more to prevent graft and self-dealing, where managers and directors 'loot' the company by smuggling out profits in ways that benefit themselves personally rather than the company as a whole.
I don't even really understand why that plan would be "enraging" or really even counter to what customers expect from Costco. Assuming you continue to buy from Costco, and most Costco customers are regular buyers, you'll effectively get the money back in future lower prices and end up paying the same total amount on Costco purchases as if they had sent you a refund check.
I can see the appeal of an immediate refund check, but using the tariff refund to lower future prices for customers in a way that drives continued sales seems like both responsible thing to do from a fiduciary perspective and a not unreasonable compromise for the customer. Many companies would, and will, simply pocket the refund.
IANAL, nor political expert - but should Costco have just said "this is an unprecedented situation, the US Gov't is still figuring out how it'll work, and there's a lot of uncertainty - so we'll make our decisions after we actually get the check"?
This article and these lawsuits both seem like manufactured outrage designed to either enrich a few lawyers or blame and distract from another more fundamental injustice, which is the tariffs themselves.
Almost everyone on this forum buys retail products, and every American’s purchases were affected by tariffs.
This article claims the victims feel “rage” about this. Have you ever felt rage for prices going up due to goods becoming more expensive? I could believe that. If so, was that rage aimed at the retailer who was forced to pay more for the imported goods, or to the person who imposed them? Weird, but okay.
If so, assuming the retailers were the target of your “rage”, did you become further enraged when you learned that the unconstitutional tariffs collected were being sought to be refunded by the people who were forced to pay them? What political Venn diagram are we in now?
And lastly, do you shop at Costco or were marketed to by Costco? If so, you would be the single person in the world that might be able to claim you are the enraged victim here. It doesn’t make sense.
I’ve talked to plenty of people who are mad about tariffs, or mad at capitalism, and certainly mad at Trump. But it’s rare to find a Costco member that thinks Costco is treating them unfairly. They’re kinda famous for the opposite in a sea of exploitive retailers. (They are “famous” for never doing loss-leader shenanigans or charging more than limited markups of 11-14% on any product.)
Hell, Costco is the only retailer that wouldn’t surprise me if they turned around and gave ME a tariff refund if they are successful.
To literally sue a company for seeking refunds to levied taxes that were declared illegal, appears to be some combination of victim blaming, political distraction, or more likely: convenient enrichment for class action mills.
I'm pretty enraged that the government was illegally taxing me, and now that those taxes have actually been found to be illegal, I'm not getting a refund.
Corporations claiming the refund on my behalf (and then not propagating that refund to me) is just icing on that shit-cake.
It's this and I don't know how people here can't see it. You're getting fleeced by corporations as they walk away with all of the money thanks to an illegal tax by the US government on most consumer goods.
Companies get to benefit from higher prices being standardized (once a price baseline go up, they rarely go back down) and they get another check from Uncle Sam.
I doubt customers have much standing here. They were free to not buy items if they didn’t like the price. And I do believe Costco will use this to lower prices vs just pocketing the money.
Customers (had to) accept prices under the assumption that the money went to the government, who are supposed to use it for the public good. You can easily argue that they would not have accepted the same price, knowing that it would benefit a for-profit corporation.
The government was busy telling the hoi polloi that foreign companies were paying the tariff. They fought US companies that wanted to list the tariffs on receipts. They were actively suppressing clarity on the matter to end buyers. Your claim that customers assumed the higher prices was going to the government is specious or simply misinformed.
Massive caveat that I'm not American, it just seems like public sentiment doesn't broadly think that all the money going to the US government is used for "public good "
Kind of like assuming tariffs are used for public benefit.
Customers are buying many goods at Costco one might deem as essential (food, toilet paper, etc) in bulk to save on cost. An illegal tax was being collected everywhere and likely at an even higher cost.
I think people are missing the forest for the trees here and immediately defending a corporation reflexively. The point here is to try and recover money that was illegally gathered by the government. Costco offloaded the tax burden onto the consumers and now they can collect said taxes back from the government.
Still, seems kind of hard to argue that retail sales are not an offer and direct acceptance of that offer.
- credit cards offered by costco offer generous cashback
- most costco food items include discount pricing thats predictable and visible in the price itself. the decimal value of the price can even determine if the item is being phased out.
- even costco memberships are broken down into savings and the staff will gladly quantify your expenditures and potential cash back should you change or upgrade a membership. unused membership portions are even refunded.
- the refunds. no questions asked, for virtually anything, any time. this is where the costco member expects tariffs to be refunded as well.
I occasionally get a gift card in the mail for a product I already purchased from Costco because they negotiated a better price for the batch after the fact.
It looks like this: https://content-images.thekrazycouponlady.com/nie44ndm9bqr/3...
This is the same if you walk the chain backwards. Suppliers to Costco that simply raised prices and internally absorbed the tariffs are the ones due a refund, not Costco. Suppliers that sent Costco and invoice with a tariff line item should be on the hook to refund Costco (which means they should be seeking a refund from the US)
If the narrative that u.s. consumers paid inflated prices because of this then the money should go back to the consumers.
And
‘They’re’
If you’re going to make legal arguments, spelling matters.
Yes, I'm being charitable but not having to spend part of the refund on an extra program could benefit their customers more in the long run.
(We're Costco members.)
But to save only the "SKU, qty., unit price, date" receipt info - which you would need to process tariff refunds - that'd be maybe 16 bytes per receipt line? To hit even 1TB/day, you'd need a billion customers, each buying 64 items. On that one day.
I'd rather they did it for good reasons. It makes it more likely that they'll continue to. But they might also do it just to help keep my business, and that suffices.
Yes, those pesky political companies...
* Paying their employees above average wages
* Working with their suppliers to achieve win/win/win outcomes wherever possible
* Stocking products that enhance their customers' lives instead of optimizing for profit margins and nothing else
* Etc
Costco is a rare example of a company doing the right thing and succeeding under late stage capitalism.
I just think their branding is more appealing to you, combined with a more pessimistic view of companies you don’t use.
> Paying their employees above average wages
Their reasons for having higher wages are well-documented and they are equally self-serving.
> Stocking products that enhance their customers' lives instead of optimizing for profit margins and nothing else
They are one of the most aggressive profit seekers in existence! Often that presents publicly in their deals with supplier.
If this is your idea of "appealing branding" then call it whatever you need to.
Unfortunately, experience shows these rare gems are often one generation away from going to shit when the principled types retire and are replaced with backstabbing money grabbers who think the only way to win is in a race to the collective bottom, because "that's what everybody else is doing."
The bottom line is that they are paying their employees much more than their competitors would. You're going to pass that off as "self-serving"?
Their biggest competitor is owned by a family whose combined net worth is half a trillion dollars that derives from founding a megacorporation worth a trillion dollars....yet for some reason can't find the money to pay their employees a living wage, so they instruct their employees to go on government assistance.
They have a different business model than their competitors.
> You're going to pass that off as "self-serving"?
Yes. Their model allows a few employees to serve many customers in a high-volume system. They have advocated for minimum wage laws increases in the past to deter competitors who have different models.
> yet for some reason can't find the money to pay their employees a living wage
eye roll.
If thats the right thing and were really in late stage capitalism, I'm extreamly worried about the future.
So on this point I agree with you, but it does not substantially subtract from my overall view of Costco as a company in every other regard. I trust that in time they will revise whatever needs revision in order to be fair to everyone involved. Oddly enough, at least in my area, this doesn't seem to have resulted in a disproportionate amount of one race or another.
This requires an assumption of actions that might be performed if a condition in the future is met.
That is not a solid basis for a lawsuit.
people using costco as basically a small-business depot would be lifetime non-transferable free members, and typical family/consumer gets some extra years, which they'll turn around and spend in the store anyway
win/win? costco members are sticky, and refunding cash is hard
I think that this is a standard play to seek a settlement to make the pain in the backside disappear.
Hear me out on an alternative POV: the government engaged in lawless economic coercion, and the coercion trickled down. If you don't like it, sure, you can always go get coerced somewhere else, it's your free choice. I don't see why anyone would object to that, assuming of course they are a corporation or a government
There is nothing wrong with a taxpayer who paid taxes later ruled illegal filing a request for a refund. This lawsuit is likely a shakedown opportunity for lawyers to enrich themselves. How Costco allocates the money they get back is up to them.
> That plan enraged customers who joined Costco based on the proposition that Costco would operate on the slimmest possible margins to ensure they never pay more for goods than Costco can afford to sell them.
I feel like Costco is generally a pretty good company, but this is a wild fantasy when dealing with any commercial entity with a fiduciary responsibility to shareholders.
Consider the Target backlash last year. They’re since down 14% vs Walmart (up 30-ish%). Regardless of anyone’s political beliefs, I don’t think a 14% loss seemingly caused by behavior that a segment of customers considered hostile is thinking of the shareholders.
To be fair, they’re being sued by customers who were marketed memberships.
"Fiduciary duty" is less strict than you'd expect. Courts generally recognize a "business judgment rule," where executives are offered broad discretion in strategy subject to some basic reasonability tests.
This would allow Costco to say "in order to cultivate goodwill and maintain our reputation, after we receive refunds we will distribute them to our customers based on purchased goods with refunded tariffs." It would also allow the directors to book the refund as profits, or use it for later incentives or marketing, or a variety of other actions.
The 'fiduciary duty' aspect here is mostly a myth. Directors do indeed have a fiduciary duty, but that duty is towards the corporation as a whole – including its long-term interests – rather than strictly towards short-term profit maximization. The fiduciary duty doctrine exists more to prevent graft and self-dealing, where managers and directors 'loot' the company by smuggling out profits in ways that benefit themselves personally rather than the company as a whole.
I can see the appeal of an immediate refund check, but using the tariff refund to lower future prices for customers in a way that drives continued sales seems like both responsible thing to do from a fiduciary perspective and a not unreasonable compromise for the customer. Many companies would, and will, simply pocket the refund.
This whole this is just lawyering at its core. I find the outrage “on behalf of customers” to be disingenuous.
Almost everyone on this forum buys retail products, and every American’s purchases were affected by tariffs.
This article claims the victims feel “rage” about this. Have you ever felt rage for prices going up due to goods becoming more expensive? I could believe that. If so, was that rage aimed at the retailer who was forced to pay more for the imported goods, or to the person who imposed them? Weird, but okay.
If so, assuming the retailers were the target of your “rage”, did you become further enraged when you learned that the unconstitutional tariffs collected were being sought to be refunded by the people who were forced to pay them? What political Venn diagram are we in now?
And lastly, do you shop at Costco or were marketed to by Costco? If so, you would be the single person in the world that might be able to claim you are the enraged victim here. It doesn’t make sense.
I’ve talked to plenty of people who are mad about tariffs, or mad at capitalism, and certainly mad at Trump. But it’s rare to find a Costco member that thinks Costco is treating them unfairly. They’re kinda famous for the opposite in a sea of exploitive retailers. (They are “famous” for never doing loss-leader shenanigans or charging more than limited markups of 11-14% on any product.)
Hell, Costco is the only retailer that wouldn’t surprise me if they turned around and gave ME a tariff refund if they are successful.
To literally sue a company for seeking refunds to levied taxes that were declared illegal, appears to be some combination of victim blaming, political distraction, or more likely: convenient enrichment for class action mills.
Corporations claiming the refund on my behalf (and then not propagating that refund to me) is just icing on that shit-cake.
Companies get to benefit from higher prices being standardized (once a price baseline go up, they rarely go back down) and they get another check from Uncle Sam.