$70,000. That’s the amount Dame Products, a sexual wellness company, paid in tariffs stemming from the now-illegal International Emergency Economic Powers Act (IEEPA) in 2025, and it’s a figure that illuminates a much larger economic reckoning unfolding as companies grapple with the fallout of the Supreme Court’s recent ruling. While major corporations are preparing legal battles for potential refunds – estimated at a staggering $165 billion nationally by the Penn Wharton Budget Model – Alexandra Fine, CEO of Dame, is already proactively returning the money to her customers. This isn’t simply a gesture of goodwill; it’s a calculated business decision rooted in a clear understanding of where the true cost of tariffs landed: squarely on the consumer.
The 90% Pass-Through Rate: Who Really Paid Trump’s Tariffs?
The narrative pushed by the Trump administration consistently maintained that foreign governments and exporters absorbed the brunt of tariff costs. However, a study by the Federal Reserve Bank of New York directly contradicts this claim, finding that nearly 90% of U.S. tariffs were passed on to American consumers and businesses in the form of higher prices last year. While other analyses suggest a slightly lower “pass-through” rate, the consensus is clear: the burden wasn’t borne by those intended. Dame Products’ decision to implement a $5 “Trump tariff surcharge” in April 2025, reflecting the 20% tariff on goods from China where the company manufactures, demonstrates this reality. The surcharge wasn’t absorbed by Dame; it was explicitly added to the customer’s bill. Now, with the IEEPA tariffs deemed unlawful, Fine is reversing that process, “just clicking a button” to issue automatic refunds.
Drawn from CBS News.
This move by Dame isn’t isolated. Cards Against Humanity is offering partial refunds contingent on their successful recovery of tariff payments, and law firms like Morgan & Morgan are already filing class action lawsuits against companies like FedEx and EssilorLuxottica (Ray-Ban) on behalf of consumers. The legal landscape is rapidly shifting, but the core question remains: how will these refunds actually reach the individuals who paid them? The Supreme Court ruling didn’t address the refund mechanism, creating a logistical and legal quagmire.
Beyond Legal Battles: A Question of Corporate Responsibility
The contrast between Dame Products’ proactive approach and the more cautious stance of larger companies is striking. FedEx, for example, states it will only issue consumer refunds after receiving its own reimbursement from the government, a process dependent on “future guidance” and court rulings. This highlights a fundamental tension: while legal compliance is paramount, a purely legalistic approach risks alienating customers who demonstrably overpaid for goods. Alexandra Fine’s rationale – “if somebody charges you something and it's unlawful, they should give you your money back” – taps into a basic sense of fairness that resonates with consumers.
The $100,000 in tariffs Dame paid last year, with $70,000 attributed to IEEPA, represents a significant sum for a relatively small company founded in 2014. Yet, Fine views it as a cost of doing business ethically. This decision, while potentially impacting short-term profits, is likely to bolster brand loyalty and attract customers who value transparency and integrity. It’s a calculated risk, betting that long-term reputation outweighs immediate financial gain.
The New Tariffs and the Looming Refund Uncertainty
The situation is further complicated by the fact that President Trump, following the Supreme Court’s ruling, has invoked another trade law to impose a temporary, across-the-board duty on U.S. imports, now at 15% for products from China. This effectively replaces the invalidated IEEPA tariffs, ensuring the flow of tariff revenue – and the associated cost to consumers – continues. This move underscores a key point: the issue isn’t simply about reversing past tariffs, but about the ongoing impact of protectionist trade policies.
What this means for your wallet: Don’t expect a flood of tariff refunds to hit your bank account anytime soon. While lawsuits are progressing, the process will be lengthy and complex. The key question consumers should be asking isn’t if they’re entitled to a refund, but how they will actually receive it. Watch closely to see if other companies follow Dame Products’ lead and proactively reimburse customers, or if the onus will fall on individuals to navigate a potentially arduous legal process. The next six months will reveal whether corporate responsibility or legal maneuvering will ultimately dictate the fate of these billions in improperly collected tariffs.
