Costco disputes a customer’s tariff lawsuit as some import duties are refunded

Costco is fighting a member’s lawsuit over alleged tariff charges, arguing that its legal position is still intact even as the retailer reports that some refunds connected to tariff-related import duties are moving through the system. The dispute centers on whether Costco should be required to refund members for certain costs associated with tariffs and related trade measures.

In the latest development, the attorneys for the customer said one of Costco’s main arguments against member refunds has “evaporated,” pointing to changes in how the retailer has handled the tariff-related payments. The customer’s legal team framed the case around Costco’s shifting circumstances as refunds begin to flow.

Costco’s filings and statements, as described in the reporting, indicate the company is now recouping some duties it paid under the International Emergency Economic Powers Act, commonly referenced as IEEPA duties. IEEPA is a U.S. law that can authorize emergency economic measures, including certain trade and tariff-related actions. In this context, the reporting suggests Costco’s ability to recover some of those duties is altering the practical stakes of the refund debate.

The member’s suit, described in the coverage, is positioned as a challenge to whether Costco should pass back money to members after the underlying tariff-related payments are recovered. Costco has treated member refunds as a contested issue within the litigation, and the company’s lawyers have previously relied on arguments meant to limit or block refund claims.

However, the reported shift is that refunds are now being processed for some amounts, and the customer’s attorneys are using that to rebut Costco’s reasoning. In their view, Costco’s earlier justification for denying refunds no longer holds if the retailer is able to recover the underlying duty payments.

The reporting does not provide granular figures on how much is being refunded, how many members are affected, or the exact timing of any administrative steps. It also does not specify whether the dispute will hinge on whether Costco’s recovery applies to all challenged items or only a subset tied to particular duty assessments.

For Costco, the dispute highlights a broader legal and operational problem for retailers in tariff-heavy environments: how to treat customer-facing charges when governments adjust the underlying tax or duty framework, or when payments are later reduced or refunded through administrative channels. When duty recoveries happen after the fact, companies can face pressure from customers to return money, even if the original pricing decisions were made before recoupment.

The coverage leaves several key issues unresolved. It does not state what Costco’s current position is in response to the “evaporated” claim, nor does it disclose the company’s estimate of total refund exposure across the lawsuit. It also does not clarify whether the case will turn on legal technicalities, such as whether recovery occurred before or after the charges were applied, or on whether the class or refund scope is limited.