FedEx and UPS are holding or pursuing large tariff refunds tied to business shipments, but the path from refund approval to small business customers is not always direct. FedEx has acknowledged about $800 million that it describes as money held for customer refunds, while UPS has disclosed roughly $5 billion in tariff charges collected from customers and says it is seeking refunds on their behalf. The payments stem from a court finding that certain emergency tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unconstitutional. U.S. Customs and Border Protection is using the Consolidated Administration and Processing of Entries (CAPE) system to process refunds, and that system routes payments first to the party listed as the Importer of Record on the original customs filing. In many express-shipping cases, that party may be a carrier, broker, or intermediary rather than the small business that paid the surcharge. That gap is why small shippers that imported goods in 2024 or 2025 may need to check their paperwork before assuming refunds will arrive automatically.
The refund program turns on who was listed as importer of record
The refund issue traces back to tariffs the Trump administration began imposing in 2018 under authority claimed through the International Emergency Economic Powers Act. Courts later determined that certain IEEPA-based tariffs exceeded that authority. U.S. Customs and Border Protection continued collecting the contested duties through February 24, 2026, which means the refund-eligible period covers several years of imports, including 2024 and 2025 shipments where tariff surcharges were often embedded in carrier invoices.
To process repayments, CBP built the CAPE system within its ACE Secure Data Portal. The system accepts refund filings from licensed customs brokers or entities designated as the Importer of Record (IOR) on the original CBP Form 7501, the entry summary filed at import. That IOR designation is the key detail for small shippers. Whoever was named on the form receives the refund first, even if another business ultimately paid the tariff surcharge.
In standard small-package express scenarios handled by FedEx or UPS, the carrier may act as IOR on behalf of the shipper. That is especially relevant for shipments that moved near or below the de minimis threshold, which had previously allowed many low-value imports to avoid formal entry requirements before the 2024 to 2025 tariff escalation period covered in reporting on how small businesses navigated the 2024 to 2025 tariff environment.
This is not a new routing problem. Earlier Section 301 tariff disputes created a similar pattern, with carriers and brokers that filed entries for customers receiving exclusion refunds first. Whether that money then moved to the underlying shipper depended largely on contract terms and internal reconciliation processes. Customs advisers are now pointing to that history as the clearest warning sign in the current IEEPA refund cycle.
Brokers and carriers may receive the money before small shippers do
A freight broker or carrier can receive a tariff refund that a small business believes belongs to it without any obvious wrongdoing. The issue comes from the way customs rules and commercial contracts fit together. When a shipper hired a licensed customs broker in 2024 or 2025 and signed a standard Power of Attorney (POA), that agreement likely allowed the broker to act on the shipper’s behalf in customs matters, including post-entry claims and refunds.
Because CBP’s CAPE system limits who can file refund claims, a broker holding a POA may be legally positioned to file, receive, and hold the refund. The obligation to remit that money to the shipper is usually governed by the broker’s service agreement, not by a separate CBP process. Many small businesses have not reviewed those agreements closely enough to know whether refunds can be offset, delayed, or applied as credits.
DeMar Consulting Group, a customs advisory firm that has published guidance on IEEPA refund recovery, is advising importers to pull every entry number from their 2024 and 2025 shipment records, compare those entries against the IOR named on Form 7501, and verify whether a broker or carrier filed or can file the CAPE claim on their behalf before treating any refund as expected revenue.
Broker service agreements may allow refunds to be applied against outstanding fees, credited to future invoices, or held for a reconciliation period of 60 to 90 days. Those provisions can delay or reduce what a shipper receives without necessarily creating a breach of contract. The concern is especially important when a broker receives one lump-sum CAPE payment covering entries for many customers at once.
Liberty Justice Center, the public interest law firm involved in IEEPA tariff litigation, has said the central question is not whether refunds will be passed through, but how efficient and transparent that process will be. The firm’s warning is notable, but its role in tariff litigation also matters. Its framing reflects an advocacy interest, and independent customs data has not yet established how often individual small shippers fail to receive money they are owed.
Aggregate refund totals are large, but small business recoveries will vary
The government has identified about $166 billion in tariff revenue that could be subject to refund across all IEEPA duty categories. That figure includes importers of all sizes and many product categories, so it should not be read as a direct estimate for small-package express shippers. Within that broader pool, Phase 1 CAPE refunds are expected to return more than $1 billion through major carriers, based on public disclosures from FedEx and UPS.
Those aggregate figures can be misleading for individual businesses. A small company that imported $50,000 in goods subject to a 25% IEEPA tariff surcharge in 2024 might expect a $12,500 refund, but the actual amount could be smaller depending on tariff lines, exclusions, entry status, and how the carrier allocated charges across shipments.
The recovery gap between large and small importers is structural. Large importers often have customs compliance teams, in-house counsel, and broker contracts with explicit refund pass-through language. Small businesses that rely on a carrier’s standard express service or a third-party logistics provider may depend on those intermediaries to identify, file, and remit refunds without a clear contractual enforcement mechanism.
That makes the issue similar to other financial oversights that compound over time for small business owners. Refund windows are time-sensitive, and shippers that do not verify IOR status may have limited options once carriers complete their internal reconciliation cycles.
Litigation adds another layer of urgency. Class actions targeting FedEx, UPS, and large retailers, including Costco, highlighted in Bloomberg Law coverage, frame carriers and intermediaries as potential targets if surcharge savings or refunds are not passed back to customers. Whether those cases will directly help smaller shippers or remain focused on larger commercial accounts is not yet clear from the available filings.
Small shippers should verify entries, contracts and invoice records now
Small businesses do not need to assume they have lost access to refunds, but they should not wait passively either. The most useful first step is to assemble the documents that show who filed the entry, who paid the surcharge, and what the broker or carrier is required to do with any money it receives.
- Pull every entry summary for covered shipments from 2018 to 2026. Request the CBP Form 7501 entry summary for each import shipment filed during the IEEPA tariff period. The IOR field identifies who is legally positioned to receive the CAPE refund first. If your company is listed as IOR, you may be able to work with a licensed customs broker to file through the ACE Secure Data Portal. If a carrier or third-party broker is listed, the refund will flow to that party first.
- Review your broker Power of Attorney and service agreement. Look for language covering post-entry refunds, credits, offsets against outstanding invoices, and reconciliation timelines. Agreements that allow refunds to be applied against fees or held for more than 30 days without notice create the most uncertainty. If the agreement is silent, request written clarification from the broker.
- Contact your carrier’s tariff refund team in writing. FedEx and UPS have both indicated they are processing refunds where they served as IOR, but neither disclosure establishes a fully automatic process for every shipper. FedEx has said it will issue refunds to shippers that originally bore the charges, while UPS has said it will remit recovered money back to customers. Shippers should document shipment dates, entry numbers, and the tariff charges they paid. Phase 1 CBP payments were expected to begin around May 11 to 14, 2026, with carrier-mediated refunds to shippers realistically arriving in July to August 2026 at the earliest.
- Document the tariff surcharges paid on carrier invoices. Compile 2024 and 2025 carrier invoices and identify line items labeled as tariff surcharges, IEEPA assessments, trade duty fees, or similar charges. Match each charge to the relevant entry number. This record will be the foundation for any refund claim or dispute with a broker that received CAPE funds and did not remit them.
- Check whether later CAPE phases cover your shipments. Phase 1 covers an initial group of IEEPA entries. CBP has indicated that later phases will widen eligibility to other entry types and time periods. Shipments from late 2024 and early 2025, especially categories where tariff rates changed mid-year, may fall into later processing windows. Confirm the phase tied to your Harmonized Tariff Schedule codes before assuming the deadline has passed.
- CBP ACE Portal CAPE notices. U.S. Customs and Border Protection updates its ACE Secure Data Portal documentation when new CAPE phases open, additional entry categories become eligible, or deadlines are set. A phase announcement covering 2024 and 2025 express entries would expand the eligible pool for small shippers that have not yet filed.
- FedEx and UPS quarterly disclosures. Both carriers report tariff-related liabilities and customer refund reserves in Securities and Exchange Commission filings. A falling FedEx reserve, currently around $800 million, would indicate that money is being disbursed. A flat or rising reserve would suggest that refunds are moving slowly or have not yet begun in scale.
- Bloomberg Law tariff-refund dockets. Bloomberg Law‘s coverage of class actions against FedEx, UPS, and large retailers is a useful public window into how courts view refund pass-through obligations. A ruling that intermediaries must remit refunds within a defined period, or that retaining float creates unjust enrichment, would change the risk calculus for brokers holding CAPE proceeds.
- Liberty Justice Center IEEPA updates. The firm’s litigation updates track the legal foundation behind the refund program. Any appellate reversal or Supreme Court reconsideration of the underlying tariff ruling could affect whether CBP continues processing CAPE refunds.
- NCBFAA broker guidance. The National Customs Brokers and Forwarders Association of America (NCBFAA) may issue guidance on broker obligations and standard POA language. Such guidance would signal whether the broker industry is moving toward standardized refund pass-through practices or waiting for regulatory direction.
The unresolved issue is whether small shippers can track money routed through intermediaries
CBP designed the CAPE refund process around Importers of Record for administrative efficiency, not to disadvantage small shippers. Even so, that structure creates the same category of silent financial loss that auditors and compliance advisers often identify as preventable small business revenue leakage. The available disclosures from FedEx and UPS show that large refund pools exist and that both carriers intend to pass money back to customers. They do not yet answer the practical questions small businesses care about most: whether refunds will be automatic, how long pass-through will take, what audit rights individual shippers have, and what happens when a broker or carrier receives money before the company that paid the surcharge knows it exists.
