Costco says it has used money returned by the federal government following a major tariff ruling to lower prices on a range of everyday products for its members.
The warehouse retailer received $184 million in tariff refunds during its fiscal fourth quarter after the Supreme Court struck down President Donald Trump’s use of emergency powers to impose tariffs on imports.
Costco was among the companies that sued the federal government over the tariffs. With more refunds still expected, executives say the company is putting much of the money back into lower prices across its stores.
Costco says tariff refunds are being passed on through lower prices
Of the $184 million Costco received during the quarter, $174 million came from refunded tariffs and another $10 million came from interest.
The amount represents a little more than one-third of the total refunds Costco expects to receive, putting the anticipated total above $500 million. The company has also already received a similar amount during the first quarter of its 2027 fiscal year.
CEO Ron Vachris said Costco has “reinvested some of these dollars to give value back to our members.”
“This was predominantly through price reductions on a number of items in the second half of the quarter, including everyday items in produce, meat and beverages and some nonfood items such as home furnishings and hardware,” Vachris said.
UnsplashChief Financial Officer Gary Millerchip said Costco specifically looked for products where the price reductions could have the biggest effect on shoppers.
“We view that as very much giving value back to our members for the tariff refunds that we received,” Millerchip said. “Our goal was to make sure that we spread those as we could to items that would have the most impact for members.”
Millerchip added that tariffs had affected “quite a few everyday items,” including products outside Costco’s food categories.
The company plans to continue using the majority of the additional tariff refunds it receives to increase value for members, according to Millerchip.
The refunds stem from tariffs that importers paid when bringing goods into the US. While Trump has said foreign countries pay tariffs, the duties are collected from US importers, which can then choose whether to absorb those costs or pass them on through higher prices.
Research from the Kiel Institute estimated that US consumers and importers ultimately carried around 96% of the tariff burden, with foreign exporters absorbing about 4%. The analysis examined more than 25 million shipment records representing over $4 trillion in US imports.
Separately, Yale University’s Budget Lab estimated that tariffs increased costs for the median US household by roughly $1,100 annually, although the impact varied depending on household income and spending.
Costco isn’t the only major company using tariff refunds to pass savings back to customers.
Earlier in September, Nintendo announced a major Customer Appreciation Sale offering 30% off dozens of Nintendo Switch games and bundles, alongside discounts on select physical games, accessories, amiibo, and apparel.
Nintendo said the promotion was “made possible in part by tariff-related refunds,” adding that it had absorbed most tariff-related costs but was using some of the refunded money to fund promotions for customers.
I’m Abhishek Sharma, an author at TigerJek.com. I enjoy exploring games, testing different strategies, and turning what I learn into clear, useful guides. My goal is to help players understand the game better and improve without the usual confusion.
