Years ago, when Craig Jelinek was running Costco, he floated the idea of raising the price of the food court hot dog to co-founder Jim Sinegal. “If you raise the effing hot dog, I will kill you,” Sinegal told him, as Jelinek recalled in a 2018 interview, according to NPR. The hot dog and soda combo has cost $1.50 since the mid-1980s, and on Thursday the warehouse chain gave its members another reason to trust it with their money.

On its fourth-quarter earnings call, Costco said it had received $184 million in tariff refunds from the federal government and had turned part of that money into lower prices on groceries, home furnishings and hardware, Fox Business reported. More refunds are on the way, and executives said most of them will go into better prices for members too.

The government paid Costco back, and Costco is passing at least part of that money on to its members.

Costco Put Its Tariff Refund Into Produce, Meat and Hardware

CEO Ron Vachris told investors 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,” he said on the call, according to Fox Business.

Chief Financial Officer Gary Millerchip said Costco looked for the items where lower prices would matter most. “Our goal was to make sure that we spread those as we could to items that would have the most impact for members,” he said, adding that the company also put money into nonfood areas that the emergency-powers tariffs had hit when they were first introduced.

The $184 million breaks down into $174 million in refunded tariffs and $10 million in interest, and Millerchip said it represents a little over one-third of what Costco expects to receive in total, which puts the full amount above $500 million by Dexerto’s math. He added that the company had already received a similar amount in the first quarter of its new fiscal year. The refunds landed in a strong quarter for the Issaquah, Washington-based retailer, which reported nearly $96 billion in fourth-quarter revenue, up 11% from a year earlier, with net income up 15%, KIRO 7 reported.

Why Costco Was Owed a Tariff Refund in the First Place

Last December, Costco sued the Trump administration in the U.S. Court of International Trade, seeking a refund of the tariffs it had paid in case the Supreme Court declared them illegal, NPR reported at the time. Dozens of companies filed similar suits, including Revlon, Bumble Bee and Kawasaki.

The Supreme Court then ruled that President Donald Trump couldn’t use the 1977 International Emergency Economic Powers Act to impose his sweeping import taxes, including the “reciprocal” tariffs on nearly every other country, because Congress holds the power to tax, the Associated Press reported. In February, Judge Richard Eaton of the U.S. Court of International Trade ruled that “all importers of record” were “entitled to benefit” from that decision. By mid-December 2025, the government had collected more than $130 billion under the now-defunct tariffs and could ultimately owe refunds worth $175 billion, according to calculations by the Penn Wharton Budget Model, which the AP cited.

About one-third of Costco’s U.S. merchandise comes from abroad, mostly nonfood items, according to NPR, and the company had to pull several items from its warehouses last year and replace them with others, Fox Business reported. Vachris said the tariffs “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.”

Who Actually Paid for the Tariffs?

Trump has said foreign countries pay tariffs, but the duties are collected from U.S. importers, which can either absorb the cost or pass it on through higher prices, Dexerto noted. Research from Germany’s Kiel Institute, based on more than 25 million shipment records covering over $4 trillion in U.S. imports, estimated that American consumers and importers carried about 96% of the tariff burden. At the same time, foreign exporters absorbed about 4%, Dexerto reported, and Yale University’s Budget Lab estimated that tariffs cost the median U.S. household roughly $1,100 a year, though the impact varied by income and spending.

When a company gets that money back, it can keep it or hand it to the people who, according to those estimates, paid most of it in the first place.

Costco Isn’t the Only One Giving Tariff Money Back

Earlier this month, Nintendo announced a Customer Appreciation Sale with 30% off dozens of Switch games and bundles, which it said was “made possible in part by tariff-related refunds,” according to Dexerto. The company added that it had absorbed most tariff-related costs itself.

Millerchip is the same CFO who, in 2024, cleared up media speculation by confirming that “the $1.50 hot dog price is safe.”. This time, he kept his credibility intact, saying, “We intend to continue reinvesting the majority of the dollars we receive in increased member values.”

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