How does Costco afford its return policy?

[kyrax12]

Seems too good to be true somewhat.

Trying a product, especially electronics and then returning it before 90 days. What do they do with the returned product?

 

[JBT]

Send it back to the manufacturer. Bed Bath and Beyond does the same thing. You want in our store? make your stuff not suck!

 

[BoomerD]

Costco doesn't eat the returns. The manufacturers agree to accept the returns or their products aren't in Costco.

We know a guy locally who was invited to sell his BBQ islands at Costco Roadshows...He declined because even though he'd have sold more islands than he does through his storefront, he'd also be required to accept any that were returned...even 2 or more years later...and in almost any condition...resalable or not. It just wasn't worth the risk to him.

 

[AeroEngy]

Costco's return policy is the awesome ... it is sad that some people abuse it.

The return policy used to not have a time limit on any product with a full refund of the original purchase price. I know a guy who bought a Pocket PC for about $400 had it for about 3 years then when it stopped working took it back with no receipt and they gave him his $400 back.

People used to buy TVs and do the same thing until they changed their policy on certain electronics.

I have friends who work for Costco and the have told me of people returning dead flowers after a couple weeks or half eaten bread. They just roll their eyes and give them their money back.

I have used their return policy only twice, both times for Xbox360s. The first one was purchased when their policy was still unlimited but returned after it switched to 90 days (2 years later). I didn't want them to think I was trying to cheat them so I called and asked if it was ok. They said no problem. Then about a year after that my second one broke. So I looked at the electronics policy and it did not call out game consoles ... so I called again and they said no problem just bring it back. I did feel a little bad about it ... but they were more than willing to take it back.

 

[nageov3t]

I assume it also helps to build store loyalty.

Nordstroms kinda has a ridiculous return policy... I returned a leather jacket for store credit 6 months after I bought it because I'd lost weight and it was too big on me (still had the receipt, and I only wore the jacket like twice). but if I was going to drop $500 on a new jacket, that's where I'd do it.

 

[Beev]

I've only had to use it once. They sell these delicious grapefruit cups by their in house brand (Kirkland) and we got a box that was made from VERY under-ripe grapefruit, so we took it back and they wouldn't even exchange it for us; they just gave us cash back.

 

[gorcorps]

Costco doesn't eat the returns. The manufacturers agree to accept the returns or their products aren't in Costco.

We know a guy locally who was invited to sell his BBQ islands at Costco Roadshows...He declined because even though he'd have sold more islands than he does through his storefront, he'd also be required to accept any that were returned...even 2 or more years later...and in almost any condition...resalable or not. It just wasn't worth the risk to him.

This I didn't know. Interesting that there's no time limit and that the manufacturer has to eat all of that regardless of what happens.

 

[pontifex]

Maybe I am naive, but I like to assume that people don't abuse the policy in mass numbers.

 

[zokudu]

Maybe I am naive, but I like to assume that people don't abuse the policy in mass numbers.

You're naive. Theres a reason most stores have hoops to jump through to return items.

 

[lokiju]

I like to return my tires after about half the life has been used and get fresh ones.

Saves money.

 

[OILFIELDTRASH]

Might have something to do with the fact they have come up with a brilliant idea of charging tards just for shopping at their store and the tards act like that's a privilege. :facepalm:

 

[nick1985]

I like to return my tires after about half the life has been used and get fresh ones.

Saves money.

lol

 

[Fritzo]

You're naive. Theres a reason most stores have hoops to jump through to return items.

In Costco's case, they have minimal in store "frills", charge a membership, and have agreements with dealers. So, they can have a special return policy.

 

[NutBucket]

My parents' 32" Vizio LCD finally crapped out after 5-6 years. I joking suggested they go return it.

Really though, anyone that actually thinks its ok to expect a refund after more than 5 years of use is a lowlife IMHO. Too bad, $1k would buy a pretty darn nice replacement!

 

[waggy]

they can't that's why it was changed a while ago. people continue to abuse it and they will change it yet again.

 

[waggy]

My parents' 32" Vizio LCD finally crapped out after 5-6 years. I joking suggested they go return it.

Really though, anyone that actually thinks its ok to expect a refund after more than 5 years of use is a lowlife IMHO. Too bad, $1k would buy a pretty darn nice replacement!

I don't know. i expect something to last more then a few years.

i purchased a 22" lcd monitor (Samsung) about 2.5 years ago. it died within a year and i sent it in to be fixed. about 3 months ago it had the same issue. but since it was a year since they fixed it they wouldn't do it again.

that monitor had a issue that the resisters inside would bust after about a year. I found many sites that show how to fix it.

I expect a monitor to last more then 2-3 years. The monitor i replaced it with was not a Samsung.

 

[xBiffx]

How can you honestly ask how Costco can afford something when you pay a yearly membership. Do you pay a membership to walk into any other store (besides Sam's)? You think they don't make any profit off what they are selling already? The membership free just increases their profit margin so on the off chance they have to eat a return now and then, they are still way ahead.

 

[Newbian]

My parents' 32" Vizio LCD finally crapped out after 5-6 years. I joking suggested they go return it.

Really though, anyone that actually thinks its ok to expect a refund after more than 5 years of use is a lowlife IMHO. Too bad, $1k would buy a pretty darn nice replacement!

If it fails after that short of a time then it was a bad product.

 

[Brovane]

Regular Costco shopper. Can easily drop a couple of hundred dollars a week in the store. I have a executive membership that costs me $100 a year.

However I get 2% back on every purchase. So usually after 12-months I will get a check to use in the store for over $100 dollars. So the member ship usually pays for itself.

The gas is usually about 10-15 cents cheaper than regular gas stations. This varies somewhat. The electronics are great. However with a wife and two kids most of the purchases are food. Get a 18-count of eggs really cheap, milk, fruit, bread etc. We also buy gift cards through the store. The wife likes Coffee Bean so I will buy $100 of gift cards for $80. Also we can get California Pizza Kitchen gift cards for the same price. Sometimes during road trips if we need a quick bite to eat. We will pull the van off the freeway at the next Costco. We will fill at the gas station and then go into the store and eat at the foot court, we can feed the entire family for around $6-8. Overall Costco is a great value for us.

 

[ViviTheMage]

You think that's crazy?

REI's is THE BEST return policy, ever.

4 years later, something you bought breaks, return it for a full refund. They will let you return anything, whenever, no timeframe.

 

[SP33Demon]

Costco's return policy is the awesome ... it is sad that some people abuse it.

The return policy used to not have a time limit on any product with a full refund of the original purchase price. I know a guy who bought a Pocket PC for about $400 had it for about 3 years then when it stopped working took it back with no receipt and they gave him his $400 back.

That has to be the stupidest fcking business model I've ever heard of.

 

[ViviTheMage]

That has to be the stupidest fcking business model I've ever heard of.

That is probably why it USED to be the return policy

 

[Zap]

Not necessarily a return policy, but IIRC Hammler Schlemmer and Roadrunner Sports warranties purchases forever.

 

[NutBucket]

I don't know. i expect something to last more then a few years.

i purchased a 22" lcd monitor (Samsung) about 2.5 years ago. it died within a year and i sent it in to be fixed. about 3 months ago it had the same issue. but since it was a year since they fixed it they wouldn't do it again.

that monitor had a issue that the resisters inside would bust after about a year. I found many sites that show how to fix it.

I expect a monitor to last more then 2-3 years. The monitor i replaced it with was not a Samsung.

If it fails after that short of a time then it was a bad product.

Uh, after 5 years all bets are off! A year or two, I wouldn't hesitate to take it back.

 

[MixMasterTang]

How can you honestly ask how Costco can afford something when you pay a yearly membership. Do you pay a membership to walk into any other store (besides Sam's)? You think they don't make any profit off what they are selling already? The membership free just increases their profit margin so on the off chance they have to eat a return now and then, they are still way ahead.

Actually look at their financial statements, they make around a 1.1 billion dollar profit a year while taking in 1.5 billion in Membership fees. Between the returns, employee salary/operating costs they actually lose money overall on the products they are selling and are only in business because of the membership fees.