For months, higher tariffs quietly worked their way into everyday shopping trips, adding costs that many retailers ultimately passed along to consumers.
Now, one major warehouse club chain says some of that money is starting to move in the opposite direction.
After receiving tariff-related relief tied to a recent court ruling, the company says it lowered prices in parts of its business instead of keeping the benefit entirely for itself.
The move could pressure competitors to respond and give shoppers an early look at how tariff refunds may affect retail pricing.
BJ’s Wholesale Club lowers retail prices amid tariff refunds
BJ‘s Wholesale Club (BJ) says it used tariff refunds to reduce retail prices and return value to customers who previously absorbed higher costs during the tariff hikes.
“As a result, we saw roughly half a point of deflation in our retail pricing, and our price gaps improved as we leaned into delivering meaningful savings for our members,” said BJ’s CEO Bob Eddy during the company’s latest earnings call.
This follows a series of legal and administrative developments tied to country-specific tariffs imposed during President Donald Trump’s administration.
In February 2026, the Supreme Court allowed a ruling to stand that determined certain country-specific tariffs issued under the International Emergency Economic Powers Act (IEEPA) exceeded the authority used to implement them. The decision ultimately led the Court of International Trade to order refunds for affected duty payments.
Following the ruling, U.S. Customs and Border Protection (CBP) launched its Claims and Appeals Processing Environment (CAPE) portal to begin processing an estimated $166 billion in refunds owed to eligible importers.
BJ’s has not disclosed the total amount of refunds it expects to receive. However, executives said tariff refunds contributed approximately 50 basis points (0.5%) to quarterly merchandise margin performance, amounting to roughly $20 million.
The company did not specify which product categories saw price reductions or whether those lower prices would continue beyond the current period.
BJ’s price investments continue to support growth
Even as it invested in pricing, BJ’s continued to post growth across key financial metrics.
During the first quarter of fiscal 2026:
- Net sales increased 9.9% year over year
- Comparable club sales rose 6.3%
- Gross profit climbed to $1.03 billion, compared with $969.5 million a year earlier
At the same time, merchandise gross margin declined around 10 basis points (0.1%) compared with the prior year, which the company said was primarily driven by investments in pricing and partially offset by tariff refund benefits recognized during the quarter.
Selling, general, and administrative expenses (SG&A) increased to $806 million from $760.9 million during the same period last year.
According to BJ’s, the increase reflected higher labor, occupancy, and operating costs associated with the opening of new clubs and gas stations.
“We remain committed to maintaining competitive price gaps, particularly in this environment, and we will continue to invest in value where it makes sense for the long term,” said BJ’s CFO Laura Felice in the company’s latest earnings call.
Competitors are signaling similar tariff-refund strategies
BJ’s is not the only retailer suggesting that tariff-related savings be used to support lower pricing.
Walmart (WMT) has said it intends to prioritize price investment and pass a portion of savings through to customers as it pursues approximately $2.4 billion in tariff refunds.
“We think the single best return that we can have on a dollar capital right now is to invest in the customer and invest in price,” said Walmart CFO John David Rainey in the company’s latest earnings call. “We’ll continue to lean in and try to be there for our members and customers in this environment.”
Costco (COST) has also indicated that it plans to return part of tariff-related savings to shoppers, although the company said it has not yet received any refund payments.
“Our plan is to return to our members in some form the portion of tariffs that were passed on to them,” said Costco CEO Ron Vachris in the company’s latest earnings call. “How much we return and when depends on a variety of factors. Including how much refund money we receive, and when it arrives.”
What tariff refunds could mean for shoppers
While the federal government has opened the claims process, many businesses remain in the early stages of receiving and accounting for refunds.
According to estimates from the Joint Economic Committee, American families incurred more than $1,700 in tariff-related costs during the period the tariffs remained in effect.
Here’s some of my previous coverage of retail strategy:
- Grocery chain resumes store closures after monthslong pause
- Target brings back iconic partnership after 17-year shutdown
- Convenience store giant sells stores, exits market
That makes retailers’ public commitments notable, since companies are under no legal obligation to pass through proceeds in the form of lower prices.
Whether more retailers follow through and whether price reductions become meaningful enough for consumers to notice remains uncertain. The outcome could depend on the timing of refunds, competitive pressure, and how companies balance pricing with profitability.
For now, retailers appear to be taking different approaches to tariff refunds. Some are using them to support margins, while others are positioning them as an opportunity to invest in lower prices.
“Refunding the illegal IEEPA tariffs back to the businesses that paid them is pro-worker, pro-customer and pro-growth,” National Retail Federation VP Supply Chain & Customs Policy Jonathan Gold said in a statement.
“When retailers and small businesses can invest with greater certainty, consumers benefit through more competitive pricing, improved service, and a stronger retail workforce.”
