UPS holds $270M in tariff refunds owed to importers

The news

UPS was holding about $270 million in IEEPA tariff refunds owed to customers at the end of September. It had received roughly $500 million from US Customs and Border Protection in the first refund phase, but had passed on less than half.

The money covers duties UPS paid on customers’ imports and billed back to them. UPS lists the unpaid balance as a current liability.
UPS says refunds go out on a rolling basis once Customs pays it, “but we can’t confirm when any particular refund will be issued.”

The details

The $500 million came from Phase 1 of Customs’ refund process, which opened April 20. It covers unliquidated entries and certain entries within 80 days of liquidation. UPS has passed about $230 million through to customers.

UPS is still matching refunded entries to the original tariff payments before sending money to customers.
The refunds also contributed to its cash flow. UPS reported that about $270 million received from Customs helped lift operating cash flow by $838 million in the first nine months of 2026.

Who receives the money depends on who was the importer of record (IOR). Where UPS was the IOR, it claims the refunds from Customs and returns them to the customer. Where the customer was the IOR, the customer must claim directly from Customs.

UPS applies each refund, with any interest, to past-due invoices on the account first. It returns the rest by check or ACH.
Administrative fees are nonrefundable. UPS says they covered the work of rating and assessing tariffs that were legal when charged.
Shippers can check eligible shipments through UPS's refund lookup tool using a tracking number or delivery address. Form 7501 in UPS Billing Center identifies the IOR.

The remaining refund phases require more action from importers. Phase 2 covers entries flagged for reconciliation, where UPS was not the IOR. Those customers must claim directly from Customs.

Phase 3 opened on Oct. 6. It covers finally liquidated entries with a Court of International Trade lawsuit and a court order.
UPS says it has not sued over entries where it was the IOR and is still evaluating how to pursue the remaining refunds from Customs.

Worth noting

A proposed class action against UPS over the tariff refunds ended without a court ruling. A South Carolina customs broker filed suit in federal court in Atlanta on Feb 20, seeking to represent customers who paid UPS IEEPA duties.

UPS moved to dismiss the case or compel arbitration. The broker voluntarily withdrew it on June 23, before the court ruled or certified a class.

What peers are doing

FedEx is holding about 10 times as much in customer refunds. It reported about $2.7 billion in unpaid IEEPA refunds at the end of September, out of roughly $3.3 billion it had received. Fourteen proposed class actions seek tariff refunds from FedEx.