For most of 2025, retailers absorbed tariffs quietly and passed them along wherever they could. In 2026, that changed. A Supreme Court ruling sent billions of dollars back into the hands of Walmart, Target, and Home Depot, and it’s starting to show up in ways shoppers can actually see: on price tags, in earnings calls, and in how these companies talk about their margins.

How We Got Here

In February 2026, the Supreme Court ruled that the International Emergency Economic Powers Act never authorized the president to impose the sweeping tariffs introduced in 2025. That single decision voided baseline tariffs of around 10% on most trading partners, as well as steeper rates imposed on specific countries.

The catch was that importers had already paid those tariffs, which meant the government now owed money back, and a lot of it. U.S. Customs and Border Protection had collected roughly $166 billion in duties under those rules before the ruling came down. To handle the fallout, CBP launched a dedicated refund system in April 2026 called CAPE, short for Consolidated Administration and Processing of Entries. By late August, it had already paid out more than $106 billion in refunds. This is the current backbone of the US tariff refund process: importers of record file a claim, CBP verifies it against the invalidated tariff lines, and the money flows back, sometimes with interest.

Who Got What

The size of these refunds varies widely by company, and so does what they do with the money.

Walmart received close to $2.9 billion, nearly all of what it expected. CFO John David Rainey has said the company is funneling that money into lower prices for shoppers, with the effect expected to show up through the rest of its fiscal year. Target reported a $994 million refund, one of the larger single-company windfalls disclosed so far. Home Depot received about $730 million, with roughly $685 million used to directly reduce the cost of goods sold. That refund helped lift the company’s gross margin by 0.3 percentage points in its most recent quarter. TJX, parent of TJ Maxx, Marshalls, and HomeGoods, reported $331 million, and Lowe’s logged $80 million.

Decathlon hasn’t disclosed a specific refund figure. As a France-based retailer with a smaller footprint of US-imported goods, it sits outside the group of big-box chains that have driven most of the reporting so far, a reminder that not every import-heavy business was equally exposed to the tariffs the Supreme Court struck down.

Why Companies Are Handling It So Differently

Companies Are Handling

Some retailers are treating the refund as a one-time gift to margins. Others are treating it as money that was never really theirs to keep, because in a sense, it wasn’t. Studies going back to the 2018 tariff era, along with more recent research from the Federal Reserve Bank of New York, suggest that 80% to 95% of tariff costs get passed on to consumers through higher prices. 

If that pattern holds in 2025, then a good chunk of these refunds are, functionally, money that shoppers already paid for at checkout. That’s part of why Walmart’s decision to route its refund into price cuts has drawn attention. It’s arguably the more economically defensible move, even if it isn’t the norm.

What This Means Going Forward

Means Going Forward

Tariffs haven’t gone away; they’ve just changed shape. The administration introduced a temporary 15% tariff through other legal channels shortly after the ruling, so the era of tariff-driven cost pressure on imports hasn’t ended; it’s just operating under a different legal basis.

Refunds are also still being processed. With more than $106 billion paid out and total collections under the old rules estimated near $133 billion, there’s still meaningful money left to distribute, and more companies are likely to report refund impacts in coming earnings cycles.

Earnings reports themselves are getting harder to read cleanly, since some companies count refunds as cost reductions while others treat them as margin boosts, which means comparing gross margins quarter to quarter across retailers now takes a bit more digging than it used to.

For anyone tracking US trade policy, tariff refunds are quietly one of the more important threads in the retail story right now, and one that’s likely to keep surfacing well into 2027. For more on where your money goes before it hits a price tag, our Shopping section covers stories like this regularly.

Frequently Asked Questions

Q1. What are IEEPA tariff refunds?

They’re repayments of duties collected under tariffs the Supreme Court ruled were imposed without proper legal authority. Importers who paid those tariffs in 2025 and early 2026 became eligible to claim a refund.

Q2. Why did the US Supreme Court strike down the tariffs?

In February 2026, the Court ruled that the International Emergency Economic Powers Act does not give the president authority to impose broad tariffs of this kind, invalidating the baseline rates introduced in 2025.

Q3. How much tariff money is involved in total?

U.S. Customs and Border Protection had collected roughly $166 billion under the invalidated tariffs. As of late August 2026, more than $106 billion had already been refunded through the CAPE system.

Q4. Are tariffs on US imports still in effect?

Yes. Shortly after the ruling, the administration introduced a temporary 15% tariff through a different legal mechanism, so import costs haven’t disappeared; they’ve just shifted basis.

Q5. How is each retailer using its tariff refund?

Walmart is putting its refund toward lower prices for shoppers. Home Depot used most of its refund to reduce the cost of goods sold, boosting its margin. Target and other retailers have disclosed refund amounts but haven’t all specified how the money is being used.