The Supreme Court’s ruling that Trump’s tariffs were illegal opened the door for companies to get a refund. Although the cost of the tariffs was passed on to consumers through price hikes, there was no recourse for us plebs. Many businesses were non-committal about what they’d do with that money. Costco was not one of them. During an earnings call in March, Costco’s CEO announced their plan to cut prices once the tariff refunds went through.
Companies started getting their refund checks over the summer. Costco received $184 million in tariff refunds in their fourth quarter (May 11 to August 30, 2026) and true to their word, they reinvested the majority of that money into lower prices on everyday items like meat, beverages, home furnishings, and hardware. They also plan on using subsequent refunds for the same purpose. From the New York Post:
Costco on Thursday said it received $184 million in tariff refunds in the company’s fourth quarter, the majority of which was reinvested into lower prices for members shopping at the retail giant’s warehouses.
The big box retailer said the lower pricing from tariff refunds was applied to a range of everyday items, including food and beverages, as well as other product categories.
Costco CEO Ron Vachris said on the company’s earnings call that the company “received some initial tariff refunds in the fourth quarter, and we 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.”
Costco CFO Gary Millerchip added that the company views the pricing reinvestments as “very much a giving value back to our members for the tariff refunds that we received.
“Our goal was to make sure that we spread those as we could to items that would have the most impact for members. … Quite a few everyday items were impacted.
“We did also invest some dollars into a number of nonfood areas where tariffs would have had an impact on those items, in particular, when the IEEPA tariffs were originally introduced,” he added.
Millerchip said Costco received $184 million in tariff refunds in the company’s fourth quarter, which consisted of $174 million in refunds and $10 million in interest. He added that amount represents a little over one-third of the total tariff refunds that Costco expects to receive, adding the company had already received a similar amount of refunds in the first quarter.
“We intend to continue reinvesting the majority of the dollars we receive in increased member values. As tariff refunds and tariff refund reinvestments are nonrecurring items that will continue to impact our financial results in fiscal year 2027, we plan to provide a similar level of information about the net impact on future quarterly earnings calls,” Millerchip said.
Vachris was asked about the impact of tariffs on Costco’s offerings last year since the company had to remove a number of items from stores and replace them with other SKUs.
He said it “really was most impactful in the first, second quarter, died off a little bit in the third quarter that we got back to a little bit more normalcy.”
I’ve seen some discourse over whether companies should provide direct cash refunds instead of lowering their prices. It reminds me of the lump sum vs. monthly payout lottery debate. (I would take the lump sum!) Most people recognize how sketchy the tariff era is. In practice, individually refunding customers would be a logistical nightmare for most businesses. Still, I was hoping to at least get a nice rebate check or Costco coupon to use ahead of the holidays. That said, I appreciate that Costco is making good on their promise to lower prices. At a minimum, every business that raised their prices after “Liberation Day” should be doing the same.
I was curious how other companies were handling their tariff refunds. Unsurprisingly, only 15% plan on lowering prices. FedEx has an online portal where customers can apply for a refund check. Apple, which raised prices on all of their products, is not offering refunds or lowering prices. They claim that they’re “investing” that money into U.S. manufacturing. Most Amazon shoppers are also SOL. Amazon is doing “limited” refunds. Last year they claimed their merchandise was purchased before the tariffs took effect and that any price changes were “normal fluctuations.” This was all so predictable, but that doesn’t make it less infuriating.
Photos credit: Pedro Mexicano and Natalia S on Pexels and via Instagram and YouTube
Re: Amazon – Bezos and Sanchez gotta pay for all the plastic surgery somehow.
Mega Yachts don’t pay for themselves!!
This is why I’m willing to pay a membership fee to shop Costco.
The down side is that their prices are so comparably reasonable to other retailers pricing, I end up going over budget.
Same on the “it’s easy to buy more than you came for,” but I use it all. We joined when Target capitulated to the current regime, and have not regretted our decision.
I’ve resisted Costco for years because it’s just two of us in a small home. But I consider Costco a necessity now to avoid other big box retailers. I buy my food at Trader Joe’s and local neighborhood markets (which I’m lucky to have) but gas and pet insurance alone pay for the membership. I’m also thinking of switching to their GLP-1 pharmacy when my annual subscription to WW is up.
Yep, so did walmart
Because of the spike in gas prices and personal issues, I am no longer able to shop at Aldi weekly. I live in a rural are and I have been having to do more grocery shopping at Walmart because of its proximity. Certain items, like butter, have had prices held consistently, but many items, like coffee, snacks, condiments and bread are increasing from week to week, even day to day. Walmart is loathsome and the ultimate corporate robbers of the tax payers. I hate shopping there, but it is my only option at the moment. I don’t have the free time and extra gas money to drive out of my way. The nearest Costco (and Trader Joe’s) is well over an hour away. It isn’t practical or cost effective to travel that far unless I have other reasons to make the trip, but I wish I could spend my money at a more moral company. The middle/working class are helping to perpetuate their self destruction by supporting unethical companies like Walmart.
Already loved Costco, will try to buy more through them. Vote with your dollars too.
Scrolling past the thumbnail I keep wondering when Billy Joel became CEO of Costco.
Props to them for doing right by their customers.
Hahahahaha, that Billy Joel comment just made my entire morning
You’re welcome. It’s all I can see.
I love Costco but am single and I don’t need giant vats of peanut butter. I do wish they had an alternate brand that wasn’t gigantic but sill low cost.
Though I don’t mind bringing home a giant box of croissants once in a while throw them in the freezer. Last me like months.
I am also single and manage to do most of my grocery shopping at Costco. Eggs, fruits and veggies, occasional protein, which I divide up and freeze in portion, gas, OTC meds (the allergy ones alone make the yearly membership worth it), some clothing, pretty much all my Christmas presents. I have the executive membership so I can go an hour early and my annual rebate check is a delight to receive. Oh, and they have SO MUCH more online as well that isn’t in stores. BTW, they are the largest retailer of organic food in the US and way less evil and expensive than Whole Foods!
I’m single and LOVE, LOVE, LOVE Costco! I bought a small stand-up freezer and buy my frozen veggies and fruits there along with a million other things. Their 2-packs of peanut butter are the BEST! And oatmeal, and birdseed and on and on. I also have my home and auto insurance through them. My cousin just bought tires from them and is happy. And their return policy is next-to-none. Love me some Costco!
Costco remains the pillar of corporate responsibility. They always put their people and consumers first. I grew up shopping there and after leaving New York and target failing I joined. Best decision ever.
You can make billions and still be a good part of society. They are also building a new store in LA with affordable housing on top. More companies should be like Costco.
We’ve been Costco executive members for 25 years and it always tickles me when the person checking our IDs thanks us for that. The employees seem so happy to work there.
It’s refreshing to shop someplace you feel good about.
I am single so don’t need a membership, but honestly at times like this, I want one.
I’m single and love my membership, I don’t buy food because it will spoil but vitamins, cleaning supplies, personal care and paper products it’s a good send and saves me a fortune.
This is another reason why Costco is an exception to this Canadian’s ‘buy anything except American’
I joined Costco 30+ years ago and even pay extra for an executive membership so I can shop during that special quieter hour before the store opens for everyone else. I do sometimes end up with a surplus of items, but I love donating the unopened items to my local food bank and then sharing the rest with my friends and family. It feels good to pay forward some of the good vibes that Costco generates. When a corporation goes out of its way to operate ethically, I go out of my way to patronize them. And Target can continue to kiss my a**.