Tariff refunds are hitting retailers' wallets. Here's what they're doing with the money.

Big retailers in America are receiving billions of dollars in tariff refunds from the federal government. The fate of these funds is up to the retailers themselves. Companies like Amazon, Target, and Walmart are each taking unique actions with the money. Some businesses are using the refunds to lower prices, while others have invested the funds in marketing or cutting costs. A few retailers even toy with the idea of returning the money to consumers.

As of late July, the Trump administration returned over $100 billion to businesses following a Supreme Court ruling that overturned tariffs from 1977. This accounts for about 60% of the total $166 billion collected under those tariffs. The tariff situation remains unclear, as different retailers are handling the refunds in varying ways.

Walmart, for example, received approximately $2.9 billion in refunds, which represent roughly 0.5% of its annual US net sales. The company plans to lower prices, particularly in areas like groceries and general merchandise. Target also used its $994 million refund to improve margins, contributing to higher earnings per share. Amazon received an estimated $600 million in refunds, though the company limits the refunds due to its role as a consumer, not importer.

Home Depot and Lowe's have taken different approaches as well. Home Depot used $685 million of its $730 million refund to reduce costs and boost margins, while Lowe's CEO Marvin Ellison said the company is still deciding how to allocate the $80 million it has received. Regardless of the strategy, these companies are navigating a new landscape shaped by the uncertainty of trade policy.