Dean and Professor of Law Terence Lau L’98 discussed strategies companies may employ because of the tariff refunds available to them. In a recent CFO Dive poll of financial executives, lowering prices was the most popular option.
According to Lau, focusing on pricing could be considered the riskiest when it comes to legal consequences such a move could carry. “Lowering prices feels like the responsible middle course, but legally it actually adds risk without reducing any,” Lau said.
Not only does it not resolve the claim of the customer who has overpaid, it could benefit a different person who may not have purchased the higher-priced goods. He said if lowered prices are marketed as the company saying it will pass tariff savings back, that raises questions under state consumer protection laws. In addition, it introduces antitrust considerations.
Of the four, the option that carries the least legal risk would be reinvesting refunds in the company, because Lau said that move creates no new promises, counterparties and no new claims and the decision to retain it is protected by the business judgement rule.