Costco has agreed to a proposed $14 million class action settlement over allegations that it sent Washington residents promotional emails containing false or misleading subject lines. The Costco email advertising settlement has received preliminary court approval, but it will not become final unless the court approves it after a hearing scheduled for October 2, 2026. Costco denies violating the law and has not admitted wrongdoing.
The case is titled Michael Aaland v. Costco Wholesale Corporation and is pending in King County Superior Court in Washington under case number 25-2-16392-0. It focuses on emails that allegedly promoted discounts as temporary or about to expire even though Costco supposedly intended to extend those offers.
What Does the Lawsuit Allege?
The lawsuit claims that Costco sent commercial emails with subject lines designed to create urgency. Examples identified in the settlement notice include “Today is the last day to access Member-Only Saving” and “Hot Buys available for 5 Days Only.”
According to the plaintiff, some promotions continued after the advertised deadline. The lawsuit argues that presenting an offer as temporary when it was expected to be extended could mislead consumers into making purchases sooner than they otherwise would have.
The claims were brought under Washington’s Commercial Electronic Mail Act and Consumer Protection Act. The Commercial Electronic Mail Act prohibits certain false or misleading information in the subject line of a commercial email.
The plaintiff claimed that Washington law could provide $500 for each email found to violate the statute, or actual damages, and argued that some damages could potentially be increased under the Consumer Protection Act. However, this statutory amount is not the payment automatically available to each settlement claimant.
Costco Denies the Allegations
Costco maintains that it complied with state and federal law. The company denies that the lawsuit is supported by the facts and says it has legal defences that could succeed if the case proceeds to trial.
The settlement agreement states that Costco chose to resolve the case to avoid the cost, burden and uncertainty of continued litigation. Neither the agreement nor the court’s preliminary approval should be treated as a finding that Costco sent unlawful emails. Who Qualifies for the Settlement?
- The settlement covers people who:
- Received a commercial email sent by Costco or someone acting for Costco;
- Were Washington residents when they received the email;
- Received it between June 2, 2021, and July 7, 2026; and
- Received the message at an email address appearing in Costco’s marketing data.
A person does not necessarily have to be a paid Costco member to qualify. Eligibility is based primarily on Washington residency, receipt of a covered commercial email and whether the email address can be verified through Costco’s records. People who did not receive an individual notice may still submit a claim. The settlement administrator will compare the submitted email address with Costco’s records to determine whether the claim meets the required conditions.
How Much Will Each Claimant Receive?
The settlement does not promise $500 for each email received. Costco will provide a gross settlement amount of $14 million. After court-approved legal fees, costs and the class representative’s service award are deducted, the remaining net fund will be divided equally among all eligible people who submit valid claims.
The settlement permits class lawyers to request fees of up to 33% of the fund, equal to $4.62 million, along with approved litigation costs. The named class representative may request a service award of up to $2,500. The court will decide whether to approve these amounts.
Because the number of valid claims is unknown, the final payment cannot yet be calculated. More approved claims will generally result in a smaller payment for each claimant.
How to Submit a Claim
Eligible consumers must submit a claim online or by mail by August 24, 2026. A claimant may use the identification number and PIN included in an official notice, but the claims process also allows people without those details to provide their information for verification.
Available payment methods include electronic options and a mailed cheque. Payments will not be distributed until the settlement receives final approval and any appeals have been resolved.
Submitting an approved claim means giving up the right to bring a separate lawsuit against Costco concerning the covered email practices. Class members who want to preserve their individual rights must request exclusion by August 24, 2026. Those who do nothing will receive no payment but may still be bound by the settlement if it becomes final.
What Happens Next?
The final approval hearing is scheduled for October 2, 2026, at 3:30 p.m. The court will consider whether the settlement is fair, whether to approve the requested legal fees and whether any objections should affect the agreement.
Until that hearing is completed and the settlement becomes final, no payment is guaranteed. The Costco email advertising settlement remains a proposed resolution of disputed allegations rather than a judgment that the company broke the law.