Retailers frequently use phrases such as “last chance” and “five days only” to encourage shoppers to act before a promotion disappears.
But a recent lawsuit against Costco alleges that some of those deadlines may not be as final as company emails suggest.
Costco Wholesale has agreed to pay $14 million to settle claims that it sent promotional emails to Washington residents with allegedly false or misleading subject lines.
The lawsuit claims Costco advertised certain discounts as temporary or time-limited even though the warehouse club allegedly knew the promotions would later be extended.
Costco denies wrongdoing and maintains that its emails complied with state and federal laws. The settlement does not constitute an admission that the company violated the law.
Washington residents who received commercial emails from Costco between June 2, 2021, and July 7, 2026, may now qualify for part of this settlement.
And eligible recipients must submit a valid claim by Aug. 24, 2026, to receive a payment.
Costco agrees to $14M email settlement
The proposed settlement resolves Michael Aaland v. Costco Wholesale Corporation, a class-action lawsuit pending in King County Superior Court in Washington.
The lawsuit alleges that Costco violated Washington’s Commercial Electronic Mail Act and Consumer Protection Act by sending marketing emails containing misleading subject lines.
Examples identified in the settlement notice include:
- “Today is the last day to access Member-Only Saving”
- “Hot Buys available for 5 Days Only”
The plaintiff claims that Costco used subject lines advertising temporary promotions while knowing that the offers would remain available beyond the stated deadline.
More Lawsuits:
- Meta layoffs take disturbing turn in new lawsuit
- OpenAI faces sanctions bid as copyright case escalates
- Fresh lawsuit drops bombshell on Micron stock price
Washington’s Commercial Electronic Mail Act provides for damages of $500 for each email sent in violation of the law or the recipient’s actual damages.
The plaintiff also argued that damages could be tripled under the state’s Consumer Protection Act.
Costco has denied the allegations and contended that it has fully complied with applicable laws.
The court has not ruled that Costco did anything wrong, and the proposed agreement allows the company to settle the dispute without admitting liability.
The original lawsuit was filed in June 2025. Costco later sought to have the case dismissed, but the court denied that request in October.
The parties entered mediation in early 2026, prior to reaching the proposed agreement.
Who qualifies for the Costco settlement?
The settlement class covers people who:
- Received a commercial email sent by Costco or on Costco’s behalf from June 2, 2021, through July 7, 2026
- Were Washington residents when they received the email
- Received the message at an email address contained in Costco’s records
People who received an email or mailed notice about the settlement may already have been identified through Costco’s records. Members can apply through the official website here.
However, the settlement notice states that people who did not receive a notice may still qualify if they meet the class requirements.
Related: Costco makes big payment changes
The plaintiffs estimate that the potential class could include more than 3.34 million people, based on the number of email addresses Costco acknowledged were associated with its Washington warehouses.
Court documents also state that preliminary discovery identified more than 1,700 emails sent to approximately 3.34 million Washington-associated email addresses.
The 3.34 million figure represents potentially associated email addresses and does not necessarily indicate how many people will submit valid claims or ultimately receive payments.
How much will Costco customers receive?
The amount each claimant receives has not yet been determined.
Costco will establish a $14 million gross settlement fund if the agreement receives final approval.
Payments will be divided equally among everyone who files a timely and valid claim after deductions for court-approved attorneys’ fees, litigation expenses, and a potential payment to the class representative.
As a result, the final individual payment will depend largely on how many eligible people submit claims.
Class attorneys plan to request up to one-third of the fund, or $4.62 million, in legal fees, up to one-third fo the $14 million settlement fund.
The named plaintiff, Michael Aaland, may receive a service award of up to $2,500.
The court will determine whether those amounts are approved. Costco has separately agreed to cover the costs of administering the settlement, including notifying potential class members and processing claims.
Eligible Washington residents must submit their claims online or by mail by August 24, 2026.
Those who do nothing will not receive a payment. However, unless they formally exclude themselves, they will retain the ability to pursue a separate lawsuit against Costco for claims covered by the settlement.
The court has scheduled a final approval hearing for October 2, 2026.
Payments will not be distributed unless the court grants final approval and the agreement becomes effective.
