alt.hn

3/31/2026 at 4:55:16 PM

Costco sued for seeking refunds on tariffs customers paid

 https://arstechnica.com/tech-policy/2026/03/costco-sued-for-seeking-refunds-on-tariffs-customers-paid/

by AdmiralAsshat

4/5/2026 at 12:12:13 PM

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.

by cmiles8

4/5/2026 at 12:44:33 PM

> 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.

by Hendrikto

4/5/2026 at 4:09:49 PM

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.

by bloppe

4/5/2026 at 12:54:15 PM

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 "

by louisbourgault

4/5/2026 at 4:33:19 PM

Then why do they continue to lobby for higher taxes, etc.

You cannot do that if you simultaneously feel the government is the not the best custodian of those marginal dollars.

by matt-attack

4/5/2026 at 1:06:46 PM

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.

by lsaferite

4/5/2026 at 5:16:16 PM

Costco explicitly itemized in their public earnings call that part of the price increase was the tariff.

  "When we looked at -- we also source flowers from Central and South America. We looked at that item and decided that while we were able to offset some of the tariffs through similar activity that we did increase some price there because we felt that, that was something that the member would be able to absorb and it was more of a discretionary item there."
So Costco was straight up telling the public that when they raise price part of that is to pay these government tax. You keep talking about assumptions but want us to ignore that you're asking us to make alternative assumptions about the factual representations made by Costco in order to find parity with your argument.

by mothballed

4/5/2026 at 5:30:34 PM

Costco was telling it's investors why they had to raise prices. That's a conversation with investors about business costs.

Customers purchasing from them are on the revenue side and there was no line item on receipts listing tariffs, just increased prices. As a customer if you assumed that 100% of a price increase is because the business is paying tariffs, then you are almost certainly mistaken. Even if the price increase was 100% because of the tariff, the business made the decision to internally absorb the fees and not directly involve the customer. They absorbed that extra cost of business by increasing prices as needed to maintain business margins within acceptable ranges.

TL;DR: A customer paid a unit price for a good from a vendor. The cost the vendor paid or any future refunds they may receive on those costs do not factor into the transaction.

by lsaferite

4/5/2026 at 7:03:42 PM

That only works if we pretend investors and customers are wholly disjoint sets of people who don't talk to each other, or are sometimes even the same person/people. However, they are/can, so we can't pretend they're working off different sets of information. How that affects the broader case; I'm not saying here, just pointing out that we can't really treat the groups as separate in this modern era. Especially since many shareholders/investors are that because they like the customer experience so much.

by fragmede

4/5/2026 at 10:21:52 PM

I don't disagree with you at all on that point.

That being said, we should treat the designated audience of the information as an indicator how the information should be interpreted. Just because an investor shops at Costco and was on the public call doesn't somehow change the messaging on the receipt.

by lsaferite

4/5/2026 at 5:39:55 PM

>That's a conversation with investors about business costs.

Paid prices are revenue to the business, not cost.

>Costco was telling it's investors why they had to raise prices

It told everyone. They were public. There was zero limitation at all that it go to investors, nor a ban from investors being a customer. It might have been targeted to investors but it was an earnings call broadcast to customers, indeed publicly made available to ~all their customers.

>Customers purchasing from them are on the revenue side and there was no line item on receipts listing tariffs, just increased prices.

They line itemed in their earnings call that part of it was to pay for tariffs. Not saying an exact amount doesn't unbind you from this and if no tariffs are paid it is a false representation (though in this case, not wittingly so, though they should still pay to rectify this false covenant).

I think this is even more obvious if you remove the political bias here by just saying something like "part of our prices are increased to donate to charity." If it turns out the charity was paid but for whatever reason had to return the money and no charity was actually paid, it would be obvious the business must repay the customers for this breach of agreement the portion of price raised to pay the charity even though there was no fraud or intentional deceit and even if they never told the customers the exact amount of the increase actually initially paid to charity.

> Even if the price increase was 100% because of the tariff, the business made the decision to internally absorb the fees and not directly involve the customer. They absorbed that extra cost of business by increasing prices as needed to maintain business margins within acceptable ranges.

Costco did absorb part of the cost, which turned out to be no tariff owed. They are in a position now though where the customers are simply asking the company to do what they promised the public in their earnings call which was for the tariff increases to be zeroed since the company promised and itemized out they would be used to pay for tariffs which are zero. A non-zero increase based on a promise to pay a tariff but with a tariff of zero obviously breaches this covenant made in the earnings call, as it can't be simultaneously true that a non-zero amount was actually collected in payment of a tariff while zero being owed in tariff.

This isn't a moral failure or even a case of fraud, just customers asking the company to fulfill the promise they made to the public.

by mothballed

4/5/2026 at 10:51:06 PM

It was a conversation about costs driving increases in sales prices. No need to twist my words. I mentioned price in the next quoted sentence even.

It's public because they are publicly traded. How about you venture a guess at how many non-investor customers had any knowledge about that call. Maybe some number caught a news article, but it wouldn't have been an appreciable number.

> false covenant

Seriously? Even if it was a "false covenant", it was to *INVESTORS*! For an investor, it's happy days if they recoup those costs because that's a net increase in revenue.

The company set the price for the good based on their costs. Customers bought the good based on the price advertised. The fact that the company might be able to reclaim some of those costs has ZERO bearing on the price customers paid. That's as far as you need to look. Trying to contort the situation to conflate it with fraud is disingenuous. They didn't lie or defraud anyone.

> Political bias

There's no political bias in discussing the core aspect. Sure, the situation leading to it is politically charged, but the core of the issue is the company made a pricing decision based on their costs, the customers bought the products, and in the future the company might be able to recoup some of their costs.

On your last paragraph, a few things. First, tariffs were paid and have not been refunded. They are still trying to affect that change. Second, they made no promise to customers regarding tariffs. Third, you happened to use the PERFECT word here to explain why your entire argument is flawed. You said "collected in payment of a tariff" with "collected" being the operative word here. Costco did no such thing. If they had, you'd have had a line item stating so, like the one for taxes. Costco is obligated to collect and remit taxes. The importer of record is obligated to pay the tariff (or ensure it has been paid). They didn't say they were increasing prices by adding and collecting tariffs. The raised prices to offset the cost of them having to pay the tariff or to cover the higher cost of purchasing goods from parties that imported the goods and paid the tariff.

This entire lawsuit is flawed at it's core as is this entire line of argument.

by lsaferite

4/6/2026 at 4:51:42 PM

The investor call said the "member" (customer) was absorbing the tariff/tax. That is, they said they were increasing prices by partially ading the tariff. End of story, Costco has made a false representation if those tariffs are zero.

Thus the whole disingenuine "gotcha" where we say " ha ha ha, it's not on the receipt" is just a fraud to pretend the customers weren't explicitly itemized out in the investor call that they were partially paying a non-zero amount for what turns out to be a zero tariff.

Of course, we reveal your whole 'receipt' nonsense as a fraud -- the investor call came before many of these purchases while a receipt comes after the purchase yet you anachronously flip things expecting the receipt to be used to know about something that is only issued after the transaction. So you're receipt argument is flawed it its core and safely dissmissed.

by mothballed

4/5/2026 at 3:11:34 PM

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.

by laughingcurve

4/5/2026 at 5:20:38 PM

I'm saying that semantically a business that simply raised base prices to cover their increased costs cannot be attacked by using the logic that "I assumed the price increase was going to the government" unless that was specifically enumerated on your receipts. What you assume is on you.

Had the business been listing tariffs directly on receipts it would be a very different conversation.

by lsaferite

4/5/2026 at 1:20:38 PM

You know what they say about assumptions. They don’t hold up in court.

Kind of like assuming tariffs are used for public benefit.

by iAMkenough

4/5/2026 at 1:52:41 PM

Then the court is full of shit and double facing. They sure do when it is a conspiracy charge, as long as it is one of the plebs.

by mothballed

4/5/2026 at 2:08:45 PM

You may almost think that criminal and civil cases are handled differently.

by hluska

4/5/2026 at 2:13:27 PM

Ah yes we can only rely on assumptions when someone's freedom rather than money is on the line.

by mothballed

4/5/2026 at 2:57:26 PM

We could rely on facts when making determinations. Like the fact the government said foreign countries were paying for the tariffs.

by iAMkenough

4/5/2026 at 5:12:10 PM

Fact: Costco explicitly told the public that part of the price increase in some of their goods was having the customer "absorb" (pay) the price of the tariff.[]

  "When we looked at -- we also source flowers from Central and South America. We looked at that item and decided that while we were able to offset some of the tariffs through similar activity that we did increase some price there because we felt that, that was something that the member would be able to absorb and it was more of a discretionary item there."
[] Q3 2025 earnings call

by mothballed

4/5/2026 at 1:11:41 PM

> 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.

by canyonero

4/5/2026 at 4:56:21 PM

But they have the choice to buy those from other stores.

by RaftPeople

4/5/2026 at 2:30:01 PM

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.

by fzeroracer

4/5/2026 at 3:22:23 PM

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.

by SilverElfin

4/5/2026 at 7:23:32 PM

Welcome to capitalism?

by whattheheckheck

4/5/2026 at 11:41:14 AM

For this situation, Costco is in the unfortunate position of knowing what was purchased under each membership.

Still, seems kind of hard to argue that retail sales are not an offer and direct acceptance of that offer.

by maxerickson

4/5/2026 at 1:07:55 PM

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.

by nimbius

4/5/2026 at 2:04:40 PM

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 looks like this: https://content-images.thekrazycouponlady.com/nie44ndm9bqr/3...

by ceejayoz

4/5/2026 at 5:04:31 PM

> a prevailing sentiment of savings value and above all else things like rebate and cash back.

I did some consulting work there a long time ago building some software to manage inventory in one of their departments.

When we asked about their goals, like improve margins, they said "absolutely not, we will not increase beyond 14%". When we asked why, they said "the minute our customers think we are increasing margins, we will lose members, and membership is the goal."

by RaftPeople

4/5/2026 at 5:33:20 PM

What do you mean by “the decimal value of the price can even determine if the item is being phased out” ?

by cyode

4/5/2026 at 5:43:10 PM

Costco uses a convention for their retail (doesn’t work for by-weight) products where e.g .97 typically means it’s a limited run or to be discontinued.

There are others as well, they have more precise meaning for their internal procurement processes but that’s the customer facing rule of thumb.

by ewoodrich

4/5/2026 at 1:11:07 PM

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.

by ben7164

4/5/2026 at 1:54:33 PM

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...

by skeeter2020

4/5/2026 at 2:10:37 PM

‘You’re’

And

‘They’re’

If you’re going to make legal arguments, spelling matters.

by hluska

4/5/2026 at 6:02:33 PM

Hacker News is a court of law now?

by panarchy

4/5/2026 at 12:18:10 PM

It’s also not hard to argue that people accepted it because they assumed the additional money went to the government.

by stingraycharles

4/5/2026 at 12:59:49 PM

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)

by lsaferite

4/5/2026 at 1:21:04 PM

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.

by tasty_freeze

4/5/2026 at 10:56:53 PM

When I say absorbed I don't mean they didn't raise prices. I mean they didn't just transparently pass those extra tariff fees on to customers as a line item. With that increase in base costs they either lower their margins and earnings or they increase prices to keep them in a stable range. They are a for-profit business so it's highly unlikely they'd simply absorb the increased costs and not raise prices. There may have been some initial elasticity where costs rose faster than price rose.

by lsaferite

4/5/2026 at 12:52:03 PM

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.

by PlasmaPower

4/5/2026 at 1:01:21 PM

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.

by lsaferite

4/5/2026 at 1:01:12 PM

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.

by bell-cot

4/5/2026 at 1:06:59 PM

Costco requires a membership, and they do store credit back at higher tiers. They absolutely know what every member buys.

by ascagnel_

4/5/2026 at 1:49:15 PM

I suspect they're looking at the cost of implementing a one time refund/credit vs. reducing prices without the need to implement anything special.

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.)

by HankB99

4/5/2026 at 1:37:17 PM

My point was that the other stores do, too. Or 90-ish %.

by bell-cot

4/5/2026 at 1:58:21 PM

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.

by skeeter2020

4/5/2026 at 2:19:30 PM

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.

by bell-cot

4/5/2026 at 1:07:13 PM

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.

by bfung

4/5/2026 at 1:22:20 PM

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.

by koolba

4/5/2026 at 5:07:51 PM

Haha, pretty clever. I have to say it is quite impressive how people in law find ways to be the beneficiary of interactions between others. Well played.

by arjie

4/5/2026 at 1:11:33 PM

This seems premature.

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.

by Lerc

4/5/2026 at 11:52:52 AM

Whenever you see companies engaging in political positions, know one thing: it's not you they have in mind.

by glimshe

4/5/2026 at 12:26:54 PM

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.

by jfengel

4/5/2026 at 12:19:26 PM

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.

by TheTaytay

4/5/2026 at 12:27:05 PM

Lawyers get like 50% of the class action settlements its pretty wild.

by weird-eye-issue

4/5/2026 at 2:01:37 PM

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%.

by skeeter2020

4/5/2026 at 12:43:35 PM

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!

by TheTaytay

4/5/2026 at 12:52:31 PM

> Whenever you see companies engaging in political positions, know one thing: it's not you they have in mind.

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.

by swed420

4/5/2026 at 1:04:43 PM

I don’t understand how you can claim the market system is structurally broken but the big company you like is “one of the good ones”.

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.

by groundzeros2015

4/5/2026 at 1:28:05 PM

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.

by swed420

4/5/2026 at 3:36:02 PM

I'm glad the marketplace has created a provider you like.

by groundzeros2015

4/5/2026 at 3:41:45 PM

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."

by swed420

4/5/2026 at 1:44:52 PM

>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.

by NickC25

4/5/2026 at 3:41:09 PM

> much more than their competitors would

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.

by groundzeros2015

4/5/2026 at 1:17:09 PM

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.

by ben7164

4/5/2026 at 1:33:30 PM

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.

by swed420

4/5/2026 at 1:01:44 PM

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.

by rubyfan

4/5/2026 at 1:00:10 PM

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

by jareklupinski

4/5/2026 at 1:35:03 PM

> That plan enraged customers

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.

by zugi

4/5/2026 at 11:37:24 AM

> 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.

by petcat

4/5/2026 at 12:32:04 PM

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.

by joebo

4/5/2026 at 11:54:42 AM

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.

by redserk

4/5/2026 at 12:00:53 PM

Right but they're not being sued by their shareholders, they're being sued by a handful of customers and "on Behalf of All Others Similarly Situated".

by petcat

4/5/2026 at 12:06:24 PM

> they're being sued by a handful of customers

To be fair, they’re being sued by customers who were marketed memberships.

by JumpCrisscross

4/5/2026 at 1:40:18 PM

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.

by zugi

4/5/2026 at 8:15:18 PM

> To be really fair, they're being sued by lawyers

Is that the case history? Or bullshit assumption? Because this looks plaintiff sponsored.

by JumpCrisscross

4/6/2026 at 12:49:12 AM

Adding "bullshit" to a sentence does nothing to hide this kind of ambulence-chasing vulturism and exploitation - in fact it rather highlights it.

I mean, one of the legal firms behind this is Milberg PLLC, https://en.wikipedia.org/wiki/Milberg, who has been charged with illegally paying plaintiffs to sue in order to enrich themselves.

by zugi

4/5/2026 at 12:56:03 PM

> 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.

by Majromax

4/5/2026 at 12:23:00 PM

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.

by rainsford

4/5/2026 at 12:31:10 PM

Especially given the complexity of how prices actually increased. Did priced change solely due to tariffs? No, there were other factors.

This whole this is just lawyering at its core. I find the outrage “on behalf of customers” to be disingenuous.

by jagged-chisel

4/5/2026 at 2:22:55 PM

Wait I thought foreign countries paid those tariffs!

by expedition32

4/5/2026 at 1:26:12 PM

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"?

by bell-cot

4/5/2026 at 12:28:25 PM

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.

by mytailorisrich

4/5/2026 at 1:10:09 PM

> 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

by throw913

4/5/2026 at 12:38:53 PM

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.

by TheTaytay

4/5/2026 at 1:26:37 PM

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.

by kelnos

4/5/2026 at 6:27:10 PM

I think what's missing in your (and the plaintiff's) analysis is that the government did not illegally tax you, it illegally taxed importers. The fact that those importers "chose" to raise their prices as a reaction is their business decision.

I think what you and the plaintiff need to show (direct connection between supplier costs and consumer prices) fundamentally goes against free business in the US. I mean, companies change prices all the time for whatever reasons they want, no?

But IANAL, "unjust enrichment" is apparently a real claim (though not sure if it applies to a store-consumer relationship) and consumer protection laws exist, so maybe I'm wrong.

by wasabi991011

4/5/2026 at 2:35:48 PM

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.

by fzeroracer

4/5/2026 at 1:15:11 PM

[flagged]

by lokinorkle