U.S. companies are getting billions in tariff refunds. Here’s why consumers may see little of the money

American consumers paid higher prices as businesses passed at least some of the cost of tariffs through to shoppers. Now that the Supreme Court has ruled much of the Trump administration’s tariff program unlawful and the government has begun returning the money, companies are receiving billions of dollars in refunds; but most shoppers should not expect a check.

The scale of the payouts is significant. Walmart received about $2.9 billion, Target received $994 million, Apple reported a benefit of roughly $2.2 billion, Ford received a $1.3 billion tariff-related benefit, and other major companies including Home Depot, Nike and Amazon have reported hundreds of millions of dollars in refunds or receivables.

Yet the money is generally going back to the businesses that originally paid the tariffs, rather than directly to the consumers who ultimately absorbed much of the cost.

The refunds stem from the Supreme Court’s February ruling that the International Emergency Economic Powers Act did not give President Donald Trump authority to impose the sweeping tariffs at issue.

The federal government had collected roughly $166 billion to $168 billion in tariffs from about 330,000 importers. By July 31, U.S. Customs and Border Protection had certified roughly $100 billion in refunds, including interest, according to a court filing.

That has turned the refunds into an unexpected financial windfall for companies that paid the tariffs.

For consumers, however, the process is much less straightforward. Most shoppers paid the higher prices charged by retailers and manufacturers, rather than paying the tariff directly to the government. That distinction makes it difficult to determine exactly how much of a company’s tariff bill was ultimately reflected in the price of a particular product.

Walmart and Target say shoppers will benefit

Walmart provides one of the clearest examples of how companies are using the refunds.

The nation’s largest retailer received substantially all of the roughly $2.9 billion in tariff refunds for which it was eligible, according to Chief Financial Officer John David Rainey. Rather than sending individual checks to customers, Walmart says it will reinvest the money into lower prices.

“We’ve taken a disciplined approach to investing these funds back into customer experience and price leadership, prioritizing investment in grocery and general merchandise categories,” Rainey said.

CEO John Furner said the retailer is investing heavily in prices because customers are still under financial pressure.

“We’re investing heavily in price because customers need us to,” Furner said. “Customers tell us they’re still feeling some pressure.”

Walmart rolled out more than 11,000 temporary price reductions in the U.S. during its latest quarter, up from roughly 7,000 in the previous quarter. The retailer has particularly emphasized discounts on grocery products such as ground beef.

That means Walmart shoppers could receive an indirect benefit from the refund; but they are not receiving the $2.9 billion on a dollar-for-dollar basis.

Target is lowering prices instead of issuing customer refunds.

The retailer reported receiving $994 million in tariff refunds during its second quarter. The payment boosted net earnings by roughly $752 million and added $1.65 to earnings per share.

But Target CFO Jim Lee said the company would not issue individual consumer refunds tied to the tariff payments.

“We have, and we will continue to, invest in price to ensure our guests are getting tremendous value each and every time they visit us at Target,” Lee said.

That strategy highlights the fundamental problem facing consumers seeking their share of the tariff money.

Retailers can argue that lower prices provide a benefit to shoppers, but there is no simple way to calculate how much of a price reduction represents a tariff refund.

A company could use the money to lower prices, absorb another rising expense, protect its profit margin or strengthen its balance sheet. Consumers generally have no way of knowing exactly where the money went.

Why tariff refunds are difficult to pass directly to consumers

Prices are determined by far more than the cost of importing a product.

Demand, competition, transportation, labor, energy, inventory levels and broader inflation all influence the final price on a store shelf. That makes it nearly impossible to establish precisely how much a consumer paid because of a tariff.

“There are many variables that go into your costs, and your pricing schemes. And demand being obviously the most important one (for pricing),” said Brett Ryan, senior U.S. economist at Deutsche Bank.

Ryan said Walmart’s pricing systems consider numerous factors, meaning tariffs and tariff refunds may not be the dominant consideration in determining the price of an individual product.

“Walmart has very advanced pricing algorithms that take a lot of these factors into consideration, and tariffs and tariff refunds are probably not even close to the top of the list,” he said.

That creates a substantial difference between a traditional government refund and a corporate tariff refund. The government can identify the importer that paid a tariff, but it cannot necessarily identify every consumer who later paid a higher retail price.

Businesses say the money is also offsetting other rising costs

Not every company receiving a tariff refund is promising to reduce prices.

Home Depot, for example, said it would use its tariff-related benefit to offset higher costs, including energy and other product-input expenses.

The company said its financial guidance included tariff refunds that were expected to partially offset unplanned fuel, energy and other costs.

That approach may still help consumers indirectly. If a company uses a refund to absorb higher expenses instead of raising prices, shoppers could avoid another price increase.

But that is very different from returning money to consumers who already paid higher prices.

Economists estimated that the average U.S. household paid about $1,700 more during 2025 and 2026 because of tariffs. They estimated that only about 15% to 20% of that amount would ultimately return to consumers through direct refunds or lower prices.

Amazon and shipping companies are different cases

There are some exceptions.

Amazon said there were a “limited set of circumstances” in which it passed specific import charges directly on to customers. In those situations, the company said it would pass along the corresponding share of tariff refunds. Not every Amazon purchase will qualify for a refund.

Shipping companies such as FedEx and UPS also have a more direct relationship with customers who paid the tariffs.

Those companies collected tariff charges from customers shipping goods internationally and held the money on their behalf. As a result, FedEx and UPS have established processes for returning applicable refunds to customers.

FedEx said its reported cash balance included roughly $800 million in IEEPA tariff refunds, but that the money was being held for customer refunds.

For most retailers and manufacturers, however, the relationship is far more complicated because the tariff was incorporated into the company’s overall cost structure before the product reached the consumer.

Small businesses absorbed the tariffs in a different way

The refund issue also looks very different for smaller businesses.

Some small companies lacked the market power to raise prices when tariffs increased their costs. Instead, they absorbed the additional expense and accepted lower margins.

Smaller companies tried raising prices on products, but sales fell quickly. Instead, the companies absorbed the tariff costs while dealing with other financial pressures.

Some small businesses took on debt to keep the business operating and some cut their staff and other expenses. The tariff refund will now help pay down those debts.

For smaller companies using a tariff refund to stabilize the business may be the difference between remaining open and closing. But consumers who paid the original higher prices still do not receive a direct reimbursement.

Some companies are using refunds to cut prices

The picture is not entirely negative for consumers.

E.l.f. Beauty, for example, used its tariff refund to experiment with lower prices. The company had previously raised prices by $1 across its portfolio to offset tariff costs.

In May, E.l.f. reduced the price of its Halo Glow Skin Tint by $4 as a test. Unit sales increased by nearly 40%.

The company subsequently expanded the experiment and permanently reduced prices on roughly 10% of its product lineup.

“The consumer is telling us, they’re voting with their dollar,” Chief Financial Officer Mandy Fields said. “These price reductions are resonating.”

E.l.f. has received roughly $50 million in tariff refunds plus $2 million in interest and expects another approximately $10 million.

Tractor Supply has also said it is using tariff refunds to provide value to customers while absorbing higher freight and fuel expenses rather than passing all of those costs through.

“In this environment, as refunds on tariffs are coming through, our commitment is to be able to utilize that to provide great value back to our customer,” CFO Kurt Barton said. “So it’s where we’re reinvesting today to be able to help maintain our margins.”

The consumer squeeze extends beyond tariffs. The tariff refunds are arriving at a time when many households are already struggling with higher living costs.

Walmart said the pressure on its customers became more visible as gasoline prices moved above $4 a gallon. Shoppers began making trade-offs, spending more money on fuel and less on other goods.

“June was a little more obvious as we look at the quarter in terms of customers making trade-offs. And it’s why we have leaned so heavily into lower prices,” Rainey said.

Walmart’s U.S. sales increased just 2.6% in its latest quarter, below expectations of 3.8% and marking its slowest comparable-sales growth in more than six years. Customer traffic also slowed to 1.5%, compared with 3% in the previous quarter.

That weakness helps explain why some companies are choosing to use tariff refunds for discounts.

For retailers, lowering prices can be a way to attract financially stretched customers while protecting sales. The tariff refund therefore becomes both a financial benefit and a tool for competing for increasingly cautious shoppers.

Tariff refunds are giving the economy a temporary boost

The refunds are also affecting the broader U.S. economy.

Apollo Global Management chief economist Torsten Slok estimated that tariff refunds could add about 0.2 percentage points to third-quarter GDP growth. At the time of his analysis, the Atlanta Fed’s GDPNow model was tracking growth at more than a 4% annualized rate.

But the economic boost needs to be viewed carefully.

The refunds are essentially returning money that businesses previously paid to the government. They are not a recurring source of economic activity.

Atlanta Fed researchers also cautioned that the headline refund figure does not necessarily translate into an equivalent increase in spending, investment or hiring. Some companies may use the money for price reductions or investment, while others could save it, repay debt or return money to shareholders.

That makes the refunds a temporary fiscal boost rather than a permanent improvement in the economy’s underlying growth rate.

Consumers may get lower prices, but not their money back

The central question for Americans is therefore not whether tariff refunds are benefiting companies. They clearly are. The bigger question is whether consumers who paid higher prices will receive an equivalent benefit.

For most shoppers, the answer appears to be no.

Walmart and Target are using their refunds to lower prices, while companies such as Home Depot are using the money to absorb other costs. E.l.f. is permanently reducing prices on a portion of its products, while Amazon and the major shipping companies have more specific mechanisms for returning money to customers.

The result is an uneven system in which the businesses that directly paid the tariffs receive the refunds, while the consumers who ultimately bore much of the economic burden may see only a fraction of the money.

That could mean cheaper groceries, household products or other goods in the months ahead; but for many Americans, the tariff refund will show up as a lower price at the checkout counter rather than a check in the mailbox.

 

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