Costco Reaches $14 Million Settlement Over Alleged Misleading Email Promotions
Washington state members targeted with artificial urgency marketing could receive cash payouts under a proposed legal agreement.
Costco Wholesale Corp. has agreed to establish a $14 million fund to resolve a class-action lawsuit alleging the warehouse retailer repeatedly dispatched promotional emails with deceptive subject lines to Washington state consumers.
The lawsuit, Aaland v. Costco Wholesale Corp., claims the retailer created an artificial sense of urgency to drive sales. According to legal filings, promotional subject lines such as “Today is the last day to access Member-Only Savings” and “Hot Buys available for 5 Days Only” promised short-term discounts that the company allegedly intended to extend past the advertised expiration dates.
The action was brought under Washington’s Commercial Electronic Mail Act (CEMA). Enacted in 1998 prior to federal standards set by the Federal Trade Commission, CEMA is among the nation’s strictest statutes regarding commercial digital communications, allowing statutory damages of up to $500 per deceptive email in litigated claims.
Costco denied all allegations of wrongdoing as part of the agreement. Net funds from the $14 million pool will be distributed equally among valid claimants following the deduction of court-approved attorney fees, litigation expenses, and service awards.
Eligibility is restricted to Washington residents listed in Costco’s records who received qualifying marketing emails between June 2021 and July 2026. Each eligible individual may submit only one claim form, regardless of the volume of emails received.
Class members must submit a claim form by August 24, 2026, to receive compensation. The same date marks the deadline for individuals to object to the settlement terms or opt out to retain private legal action against the company. Claimants can choose payment via paper check or electronic services including Venmo and PayPal.
Affected consumers who take no action by the deadline will relinquish rights to future litigation concerning the covered claims and will receive no payout.
A final court approval hearing is scheduled for October 2, 2026, at 3:30 p.m. PT in Seattle.
