Since the Supreme Court struck down a major set of tariffs in February, the federal government has spent the months since processing billions of dollars in refunds. Almost all of that money is landing in corporate accounts rather than consumer wallets. Customs officials built an entirely new electronic system just to get the refunds out the door to the businesses that paid the duties directly, and whether any of it eventually shows up in a lower price tag depends on what kind of company received the check.
A New Government System for Paying Back Billions
The refunds trace back to Learning Resources, Inc. v. Trump, in which the Supreme Court ruled 6-3 on February 20 that the International Emergency Economic Powers Act did not give the president authority to impose the sweeping tariffs at issue. That decision set in motion a refund process that is still running seven months later. U.S. Customs and Border Protection built an electronic tool called CAPE inside its import-processing portal so importers could request refunds in bulk rather than filing on a shipment-by-shipment basis. The rollout came in stages, according to a trade-compliance tracker citing CBP’s own guidance and court filings: an initial phase opened April 20 covering most entries not yet permanently closed out, and a second phase added certain reconciliation-related entries on June 29. As of CBP’s most recent public accounting, filed with the Court of International Trade on August 21, the agency had accepted roughly $132.5 billion in refund claims for processing, with more than $106 billion of that already certified and forwarded to the Treasury for direct deposit to the importers who filed the paperwork. A third phase, covering entries CBP had already closed out entirely, remains on hold while the agency builds in additional safeguards. Refunds are typically issued 60 to 90 days after CBP accepts a claim.
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Why the Money Rarely Reaches the Register
The refunds go to the “importer of record” named on each customs entry, typically the business that brought the goods into the country, not the store where a shopper checked out. When CBP opened the refund portal in April, officials said it covered an estimated $166 billion in tariffs collected under the invalidated program. Toy importer Basic Fun! was among the earliest filers, logging more than 560 individual invoices that April seeking a projected $7.4 million back, an early illustration of how the system channels money to the businesses that fronted the tariff cost rather than to the households who ultimately paid higher prices at the register.
What happens once that money clears depends on the kind of company that receives it, according to reporting from NPR. Shipping carriers such as UPS, FedEx and DHL have pledged to pass their refunds directly to the customers who paid them, largely because those companies billed a specific tariff line item on each shipment and would otherwise risk an “unjust enrichment” claim for keeping money collected on someone else’s behalf. Large retailers face a different reality: because tariff costs were typically folded into a single shelf price instead of itemized, most say they cannot calculate how much of any individual purchase reflected the duties. Home Depot told investors it received about $730 million in refunds in a recent quarter and plans to use that money to offset rising fuel costs rather than cut prices, while Walmart executives said the company has collected most of a $2.9 billion refund and intends to put the savings toward future price cuts rather than issue money back to shoppers directly. Some customers have taken the dispute to court instead: Costco and Nintendo are both facing class-action lawsuits from shoppers seeking a share of the refunded tariffs, with Nintendo asking a judge to dismiss its case on the argument that customers received exactly the product they agreed to buy at the price they agreed to pay. Michael Ettlinger, a senior fellow at the Institute on Taxation and Economic Policy, has argued the pattern effectively shifts money from the people who paid the tariffs to the companies now collecting the refunds, since only businesses with an itemized tariff charge on record are under any real obligation to pass something back.
A Few Retailers Are Already Cutting Prices
Not every retailer is waiting to decide what to do with the money. BJ’s Wholesale Club told investors that tariff refunds added roughly half a percentage point to its merchandise profit margin in a recent quarter, worth about $20 million, and that the chain used part of that gain to lower retail prices rather than keep it. Chief executive Bob Eddy told analysts on an earnings call that the chain saw roughly half a point of deflation in its retail pricing as it leaned into delivering meaningful savings for members, according to reporting from TheStreet. Walmart’s chief financial officer, John David Rainey, told investors the company views investing in lower prices as the single best return available on a dollar of capital right now, and Costco chief executive Ron Vachris said the warehouse chain plans to return to members, in some form, the portion of tariffs that had been passed on to them, though he cautioned that the timing and size of that depend on how much refund money Costco actually receives and when. The National Retail Federation, which represents most large chains, argues the arrangement still benefits shoppers indirectly: returning the money to the businesses that paid it “is pro-worker, pro-customer and pro-growth,” said Jonathan Gold, the group’s vice president for supply chain and customs policy, because retailers reinvest refunds into pricing, staffing and stores. Whether that reinvestment shows up on any single receipt remains uneven and entirely voluntary — CBP itself can trim a refund if its review turns up a classification or origin problem with the underlying customs entry, one more reason the money moves slower and less predictably than the tariffs did when they first went up.
This article was produced with the assistance of AI and reviewed by The Financial Wire editorial team.
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David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
