Two shoppers sued Home Depot on Nov. 10 in the Northern District of Georgia, arguing the retailer shouldn't keep about $730M in federal tariff refunds while customers who paid tariff-inflated prices got nothing back.
Of that sum, roughly $685M reduced the company's cost of goods sold on merchandise already sold, and about $45M reduced the recorded cost of inventory.
The refunds trace to the Supreme Court's Feb. 20, 2026 ruling in Learning Resources, Inc. v. Trump, which held the International Emergency Economic Powers Act didn't authorize the tariffs.
The court didn't say retailers must pass the money to shoppers, which is the gap the plaintiffs have to close.
Home Depot's chief financial officer Richard McPhail told investors in August that rising fuel, energy, and product costs would offset the refund benefit over the year.
Refunds are padding earnings beats
Keurig Dr Pepper booked about $99M of tariff refunds in the third quarter, nearly the entire gap between its adjusted earnings and consensus. Sales rose 70.6% to $7.34B, lifted by the JDE Peet's acquisition, yet gross margin still contracted 590 basis points with the refund included.
On Holding's tariff refund lifted its adjusted EBITDA margin to 27.6% from 21.9% without it, a measure of operating profitability.
CNH Industrial reported $109M of pre-tax tariff refunds while raising its 2026 earnings outlook.
A chunk of this reporting season's margin strength is a one-time government payment, not improved operations.
The money has moved but not all of it
Customs and Border Protection had accepted roughly $137.9B in potential and certified refunds for processing in its CAPE system as of Oct. 23, with about $127.7B certified and sent to the Treasury for disbursement.
Another 19,797 refunds totaling about $990M have not been transmitted to the Treasury because importers had not supplied Automated Clearing House account information.
The program's expected total runs to roughly $166B once older, more complex entries are handled, according to a Conference Board backgrounder. Tariff refunds coming to corporate America have a turbulent history of their own.
Most of the Tariff Refund Pool Has Been Certified but Not All Paid Out
IEEPA tariff refunds, USD billions, as of Oct. 23, 2026
Bar chart. USD billions. Expected total refunds: USD Billions $166. Refund claims accepted for processing in CAPE: USD Billions $138. Refunds certified and sent to Treasury: USD Billions $128.
Source: US Customs and Border Protection declaration, The Conference Board
CAPE opened in phases, with Phase 1 live on April 20, Phase 2 on June 29, and Phase 3 on Oct. 6.
The government wants importers to sue one by one
In its reply brief at the Federal Circuit, the Justice Department argues that the Court of International Trade's universal injunctions exceed its authority under Trump v. CASA, Inc.
If the government wins, importers that haven't filed their own suits would need to litigate individually to recover duties, a cost that falls hardest on smaller firms.
What looks like operating leverage this quarter is in part a refund check, and the companies still waiting on the government have no guarantee of when the rest arrives.
