Retailers and consumer brands are facing a new litigation risk tied to tariff refunds: proposed consumer class actions alleging that customers paid higher prices because of tariffs that were later held unlawful.
The issue follows the U.S. Supreme Court’s February 20, 2026 decision in Learning Resources, Inc. v. Trump, consolidated with Trump v. V.O.S. Selections, Inc. The Court held that the International Emergency Economic Powers Act did not authorize the challenged tariffs. As a practical matter, that decision has prompted many importers to seek refunds of tariff payments made under the invalidated tariff measures.
For retailers and consumer brands, the refund process creates a follow-on question: if a company increased prices, imposed a surcharge, or otherwise adjusted pricing because of tariffs, and later receives a refund from the government, can consumers claim that some portion of that refund belongs to them?
Plaintiffs’ lawyers are now testing that theory in proposed class actions. The claims are still developing, and the law is far from settled. But the risk is real enough that retailers, brands, importers, and distributors should review their pricing practices, customer communications, refund strategy, and document preservation obligations now.
Why Consumers Are Suing
Consumers generally cannot seek tariff refunds directly from U.S. Customs and Border Protection because tariffs are paid by the importer of record. That means the refund process typically runs through the business that imported the goods, not the end customer.
Consumer plaintiffs are pursuing a different theory. They argue that if tariff costs were passed through to consumers in the form of higher prices, fees, or surcharges, then the company should not be allowed to keep both the customer’s tariff-influenced payment and a later government refund.
Recent lawsuits have asserted claims such as unjust enrichment, money had and received, breach of contract, and state consumer-protection violations. Reuters has reported proposed class actions involving major retailers, including Amazon and Costco. In the Amazon case, consumers allege that Amazon passed tariff-related costs to customers and violated Washington consumer-protection law. In the Costco case, Costco has moved to dismiss, reportedly arguing that the claims are speculative, that customers voluntarily paid posted prices, and that Costco has not yet received any refund or decided how any refund would be handled.
These cases are important not because plaintiffs are certain to prevail, but because they show where the next wave of consumer pricing litigation may be headed.
The Claims Plaintiffs Are Likely to Bring
Although each case will depend on the applicable state law and the company’s specific conduct, several legal theories are likely to recur.
Unjust enrichment.
Plaintiffs may argue that a retailer or brand received a benefit by collecting tariff-influenced prices and later receiving tariff refunds. Retailers will likely respond that consumers received the goods they purchased at disclosed prices and that any government refund belongs to the importer unless a specific legal duty requires otherwise.
Money had and received.
This restitution theory is similar to unjust enrichment. Plaintiffs may claim that the company is holding money that, in equity, should be returned to consumers. A key defense will be whether any identifiable consumer money exists, especially where prices were not itemized by tariff amount.
State consumer-protection statutes.
Plaintiffs may allege that tariff-related pricing statements, surcharges, or disclosures were unfair, deceptive, or misleading. This theory may be stronger where a company expressly tied a fee or price increase to tariffs.
Breach of contract.
In some cases, plaintiffs may argue that invoices, terms of sale, surcharge language, or refund policies created a contractual obligation to return tariff-related amounts. This claim will depend heavily on the company’s actual customer-facing language.
The highest-risk facts are likely to involve specific representations: a separate tariff line item, a visible tariff surcharge, a promise that a charge would be used only to cover tariffs, or a statement suggesting that customers would receive the benefit if tariffs were reduced or refunded. By contrast, claims based solely on ordinary retail pricing, without tariff-specific statements, should be more vulnerable to dismissal or later class-certification challenges.
Why Retailers and Consumer Brands Should Pay Attention
Even defensible cases can create significant cost and disruption. Plaintiffs may seek discovery into pricing models, margin analysis, supplier negotiations, refund applications, tariff classifications, internal communications, customer complaints, and public statements. That discovery may reach far beyond the narrow refund issue and into sensitive commercial information.
Public-facing statements may also become important evidence. This includes website disclosures, FAQs, customer-service scripts, invoices, receipts, marketing language, earnings-call comments, social-media posts, and communications with distributors or retail partners.
Companies that used a visible tariff surcharge or expressly told customers that prices increased because of tariffs face greater risk. Companies that simply set retail prices without referencing tariffs may have stronger defenses, but they should not assume they are immune from litigation.
Practical Steps for Retailers, Brands, and Importers
1. Review customer-facing tariff communications. Identify whether the company ever told customers that a price increase, surcharge, fee, or invoice line item was tied to tariffs.
2. Coordinate across legal, trade, finance, tax, and business teams. Tariff refunds are not only a customs issue. They may also raise consumer-litigation, accounting, tax, disclosure, and customer-relations issues.
3. Avoid unsupported statements. Companies should be cautious before saying that tariff costs were passed on to consumers unless that statement is accurate and supported by records. Broad or imprecise language can create litigation risk.
4. Review sales terms and refund policies. Arbitration provisions, class-action waivers, limitation-of-liability language, refund terms, and surcharge disclosures may be important defenses, but only if they were properly drafted and implemented.
5. Evaluate refund strategy before making public announcements. Decisions about whether to reduce future prices, issue credits, retain refunds, or apply refunds to other business costs should be reviewed carefully before they are communicated externally.
Bottom Line
Tariff refunds have created a new and unsettled class-action risk for retailers and consumer brands. Plaintiffs will argue that consumers paid tariff-inflated prices and should receive the benefit of any refund. Retailers will respond that pricing is multifactorial, customers paid disclosed prices, and a refund to an importer does not automatically create a legal duty to reimburse consumers.
The best risk-management approach is proactive. Companies should review pricing decisions, tariff-related communications, refund applications, customer terms, and document preservation practices before a tariff refund becomes the focus of a lawsuit.
Companies facing tariff refund exposure should take steps now to evaluate risk and strengthen documentation. For guidance, contact KJK Partner Dave Campbell (JDC@kjk.com).