The Structural Trap

Matthew Stockov is a Costco member in Illinois. Between February 2025 and February 2026, he purchased electronics, food, household items, small appliances, and hygiene products from Costco warehouses. The prices he paid were higher than they would have been twelve months earlier. Costco had raised them to cover the cost of tariffs imposed by the Trump Administration under the International Emergency Economic Powers Act.

On February 20, 2026, the Supreme Court ruled those tariffs were illegal. The Trump Administration terminated them. U.S. Customs and Border Protection announced it would stop collecting IEEPA duties effective February 24, 2026. Costco, which had paid approximately $166 billion in IEEPA tariffs as one of the top 35 importers in the United States, was entitled to a refund.

Matthew Stockov was not.

This is the core injustice alleged in a class action complaint filed March 11, 2026, in the U.S. District Court for the Northern District of Illinois. The case is Stockov v. Costco Wholesale Corporation, Case No. 1:26-cv-02734. It names tens of millions of putative class members: every person in the United States who purchased tariffed goods from Costco during the 13-month period when the unlawful duties were in effect.

The legal architecture is straightforward and punishing. Under federal trade law, only the importer of record has standing to file a protest or seek a refund in the Court of International Trade. Costco is the importer. Costco paid the tariffs to Customs. Costco has the statutory right to demand its money back. The consumer has no such right, even when the consumer paid the economic cost.

“While the importer of record is the only party that may recover a refund from the government for an improperly assessed tariff, the importer is often nothing more than a pass-through vehicle. Frequently, the importer simply fronts the cost of the tariff, and is made whole by imposing higher prices on consumers. The consumer, for all intents and purposes, pays the tariff.” — Stockov v. Costco Complaint, ¶ 2

This is not an edge case. It is the norm. Retailers pass costs downstream. Tariffs are costs. The party that absorbs the cost has no mechanism to recover it when the tariff is invalidated. The party that advanced the cost and was reimbursed by customers gets to sue for a refund anyway.

The Refund Math

Costco filed its complaint in the Court of International Trade on November 28, 2025, three months before the Supreme Court struck down the tariffs. The case is Costco Wholesale Corp. v. U.S. Customs & Border Prot., No. 1:25-cv-00316. It was consolidated with nearly 2,000 other importer lawsuits in a master case styled AGS Company Automotive Solutions v. United States Customs and Border Protection, 1:25-cv-00255.

On March 4, 2026, the Court of International Trade ordered CBP to refund all IEEPA tariffs. The court’s order in Atmus Filtration, Inc. v. United States, No. 26-01259, held that all importers of record are entitled to the benefit of the Supreme Court’s ruling. CBP was ordered to liquidate any unliquidated entries without regard to IEEPA duties and to reliquidate any liquidated entries for which liquidation was not yet final.

Brandon Lord, the Executive Director of CBP’s Trade Programs Directorate, provided an estimate in a declaration filed in the Atmus case. As of March 4, 2026, the total amount of IEEPA duties and estimated duty deposits collected was approximately $166 billion.

Costco imports roughly one-third of its U.S. sales. Two-thirds of those imports are in non-food categories. Goods from China account for about 8 percent of Costco’s U.S. sales. Costco also imports heavily from Canada and Mexico. In fiscal year 2025, Costco’s net sales were nearly $270 billion.

The complaint estimates Costco is entitled to at least hundreds of millions of dollars in refunds. Depending on the proportion of tariffed goods in its import mix, the figure could exceed $1 billion.

The Margin Expansion

Costco’s business model is built on low margins. The company charges annual membership fees ranging from $65 to $130. In exchange, customers expect access to rock-bottom pricing. Costco’s 10-Q filing for the quarter ended November 23, 2025, states that the company must contend with “significantly lower gross margins (net sales less merchandise costs) than most other retailers.”

During the IEEPA tariff period, that changed.

In the quarterly period ended November 23, 2025, Costco’s gross margin as a percentage of sales increased by four basis points year-over-year. Core-on-core margins, which isolate underlying merchandising performance, rose thirty basis points.

In the quarterly period ended February 15, 2026, Costco’s gross margin increased seventeen basis points. Core-on-core margins rose twenty-two basis points.

These figures appear in Costco’s official investor presentations filed with the SEC. They are not contested. They are public.

“Costco was able to expand margins during the peak of the IEEPA tariff regime by selectively raising prices on tariffed goods. The higher prices consumers paid were a consequence of Costco’s increased cost of importation. Absent the imposition of the unlawful IEEPA tariffs, Costco would not have needed to raise prices on consumers in this way.” — Stockov v. Costco Complaint, ¶ 26

The margin expansion occurred during a period when Costco’s CFO, Gary Millerchip, was making public statements that minimized the company’s tariff pass-through. On an earnings call in May 2025, Millerchip stated that “raising prices is always seen as a last resort.” He made this statement in the context of rival retailers like Walmart candidly acknowledging that they would have to raise prices in response to the tariffs.

Later in the same call, Millerchip was asked directly about Costco’s response to the Trump tariffs. He acknowledged that the company had already raised prices on some products. For certain products Costco sources from Central and South America, Millerchip said, “we saw inflation as a result from tariffs,” and conceded that “we did increase some price there because we felt that was something that the member would be able to absorb.”

The complaint contrasts these statements with Costco’s public messaging during the Class Period. A December 2025 article in The Street quoted Costco’s commitment to “never succumb to not being the best price.” The article was widely circulated in consumer-facing media.

The Non-Financial Ledger

A Reddit user posted in September 2025 after spending $225 at Costco on milk, eggs, diapers, school snacks, coffee, and toilet paper. The user noted “significant price increases on a majority of the items.” The post is archived in the r/MiddleClassFinance subreddit under the title “Angry walking out of Costco.”

In October 2025, a Facebook user posted to the Maui Stores Updates page. The user wrote: “I was at Costco last week and prices have jumped almost 30% from last month.” The user added that despite seeing “price hikes at all the grocery stores,” Costco had “hiked higher than most.”

These are anecdotal. They are also the only evidence available to consumers. Costco does not publish item-level pricing data. There is no centralized database tracking the tariff pass-through component embedded in the retail price of a bag of coffee or a pack of diapers. The shopper has no way to verify, at the point of sale, whether the price they are paying includes a tariff markup or how much of the markup will be refunded to Costco after the tariffs are invalidated.

Matthew Stockov is a real person. He is a Costco member. He lives in the Northern District of Illinois. He purchased electronics, food products, household items, small appliances, and health and hygiene products from Costco during the Class Period. He paid prices that were higher than they would have been absent the unlawful IEEPA tariffs. He did not know, at the time of purchase, that Costco had filed a lawsuit seeking a full refund of those tariff costs. He did not know that under federal trade law, he would have no standing to seek a refund himself.

He knows now.

The complaint alleges that “as a direct result of Costco’s tariff pass-through pricing, Class Members paid more for tariffed goods than they would have paid absent the unlawful IEEPA tariffs.” It alleges that Costco’s simultaneous collection of consumer tariff pass-throughs and pursuit of government tariff refunds, “without disclosing that arrangement or establishing a consumer refund mechanism,” constitutes unjust enrichment and violates state consumer protection statutes in Illinois, California, Florida, Michigan, Missouri, New Jersey, New York, Ohio, Washington, and Wisconsin.

Legal Receipts

“This class action arises from Costco’s retention of windfall profits generated by the unlawful tariffs imposed by the Trump Administration under the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. § 1701 et seq. This windfall is a direct result of Costco systematically passing on the costs of IEEPA tariffs to its own customers.” — Stockov v. Costco Complaint, ¶ 1

“On February 20, 2026, the Supreme Court invalidated all IEEPA-based tariffs. Learning Resources, Inc. v. Trump, 607 U.S. ___ (2026) (slip op. at 20).” — Stockov v. Costco Complaint, ¶ 20

“On March 4, 2026, the Court of International Trade ordered refunds of IEEPA tariffs, holding that ‘[a]ll importers of record’ are ‘entitled to the benefit’ of the Supreme Court ruling that struck down the IEEPA tariffs. Atmus Filtration, Inc. v. United States, No. 26-01259, Order at 1 (Ct. Int’l Trade Mar. 4, 2026), ECF No. 21.” — Stockov v. Costco Complaint, ¶ 34

“According to Brandon Lord, the Executive Director of CBP’s Trade Programs Directorate, as of March 4, 2026, the total amount of IEEPA duties and estimated duty deposits collected pursuant to IEEPA is approximately $166 billion. Atmus, ECF No. 31 at 6.” — Stockov v. Costco Complaint, ¶ 35

“On March 5, 2026, the day after the CIT’s refund order in Atmus Filtration, Costco CEO Ron Vachris stated that if Costco receives IEEPA tariff refunds, the company intends only to use this money to provide ‘lower prices and better values’ in the future.” — Stockov v. Costco Complaint, ¶ 38

“That hypothetical action would not make the Class whole. Returning value ‘through lower prices’ to an indeterminate group of future shoppers is not restitution to the identified individuals who paid inflated prices during the Class Period.” — Stockov v. Costco Complaint, ¶ 38

Societal Impact Mapping

Economic Inequality

The IEEPA tariff refund process is a case study in structural advantage. Corporations that passed costs to consumers retain full standing to recover refunds. The individuals who bore those costs have none. This is not a loophole. It is the explicit design of federal trade law.

Goldman Sachs estimated in August 2025 that U.S. consumers were shouldering two-thirds of President Trump’s new tariff costs. That estimate appeared in Fortune magazine and was widely cited in financial media. The research “infuriated Trump,” according to the Fortune headline, because it contradicted the Administration’s claim that foreign exporters would absorb the tariff burden.

The Stockov complaint alleges that Costco’s conduct exemplifies the broader dynamic Goldman Sachs described. Costco passed the costs downstream. Customers absorbed them. When the tariffs were invalidated, Costco pursued a refund. The customers who paid the costs were left out.

This creates a wealth transfer. The $166 billion in IEEPA tariff refunds will flow to importers of record. Most of those importers are large corporations. Many of them passed tariff costs to consumers. The refunds will not be shared with those consumers unless a court orders it.

Public Health

The complaint does not allege direct public health harm. It does allege harm to household budgets. Matthew Stockov and the proposed class members paid elevated prices for groceries, hygiene products, and household essentials during a 13-month period. Those elevated prices reduced their purchasing power.

For families operating on tight margins, a 5 percent or 10 percent increase in the cost of diapers, coffee, or eggs is material. It forces trade-offs. The choice to buy less of one essential to afford another is a form of economic harm that compounds over time.

The complaint cites two consumer accounts. One shopper reported a 30 percent price jump at Costco in October 2025. Another noted significant increases on a majority of items purchased in September 2025. These accounts are anecdotal, but they are consistent with the margin expansion data Costco reported to investors.

Environmental Degradation

The complaint does not allege environmental harm. The IEEPA tariffs were imposed on all imports, not specifically on environmentally harmful goods. The legal dispute centers on economic harm to consumers and the inequity of the refund process.

What Now?

The case is assigned to the U.S. District Court for the Northern District of Illinois, Eastern Division. The plaintiff is represented by George A. Zelcs and Ryan Z. Cortazar of Korein Tillery LLC, 205 N Michigan Ave., Suite 1950, Chicago, IL 60601.

The complaint seeks class certification under Federal Rule of Civil Procedure 23(b)(2), (b)(3), and (c)(4). The proposed class includes all persons in the United States who purchased any good subject to IEEPA tariffs from any Costco retail channel between February 1, 2025, and February 24, 2026.

A subclass is proposed for residents of Illinois, California, Florida, Michigan, Missouri, New Jersey, New York, Ohio, Washington, and Wisconsin who made such purchases during the Class Period. The subclass would pursue claims under those states’ consumer protection statutes.

The complaint alleges three counts:

• Count I: Violation of State Consumer Fraud Statutes (on behalf of the Consumer-Statute Subclass)
• Count II: Quasi Contract / Unjust Enrichment (on behalf of all Classes)
• Count III: Money Had and Received (on behalf of all Classes)

The plaintiff seeks the following relief:

• A declaration that Costco is obligated to return to plaintiff and proposed class members all IEEPA duties passed on to customers in the form of higher prices, with interest.
• Restitution of the tariff overcharges paid by class members, or a proportionate share of any tariff refunds Costco recovers.
• Actual damages and statutory relief under state consumer protection statutes.
• Prejudgment and post-judgment interest.
• Reasonable attorneys’ fees and costs.
• Such other equitable relief as the court deems just and proper.

A jury trial has been demanded.

If you are a Costco member and you purchased goods from Costco between February 1, 2025, and February 24, 2026, you may be a member of the proposed class. Class notice has not yet been issued. You do not need to take any action at this time. If the court certifies the class and approves a settlement or awards judgment, notice will be sent to class members with instructions on how to participate.

If you believe you have information relevant to this case, or if you experienced significant price increases at Costco during the Class Period and kept receipts, you may contact the plaintiff’s attorneys at the contact information provided above. Do not contact the court directly.

Mutual aid and consumer protection begin with transparency. Share this investigation with other Costco members. Demand accountability from corporations that profit twice from the same unlawful cost. Support legal aid organizations that represent consumers in class actions. The structural inequity in tariff refund law will not change unless consumers organize and litigate.