How does Costco make money with their liberal return policies?

Discussion in 'Off Topic' started by Reckoner, Dec 3, 2006.

  1. Reckoner

    Reckoner Lifer

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    I was just reading a thread over on a popular deals site, regarding people returning and rebuying expensive TVs at the time of purchase, which had since gone down in price. It seems like a lot of people treat their purchases there as part of some sort of lifetime warranty. As sad as human nature is, I'm sure a lot of people do this. Do you guys see Costco changing their return policies (like they did with computers) soon?
     
  2. KLin

    KLin Lifer

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    Membership dues
     
  3. mugs

    mugs Lifer

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    I've heard that they are going to change their return policy on TVs at the beginning of the year. Not confirmed.

    It's not the people who use their return policy as a lifetime warranty that are the problem, it's the people who use their return policy for free TV upgrades every few years who are the problem.
     
  4. RossMAN

    RossMAN Grand Nagus

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    I hope they do, it's about damn time.
     
  5. imported_gshock

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    Isn't it always the few that ruin t for the many?
     
  6. A5

    A5 Diamond Member

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    They make money because most people don't like to commit fraud.
     
  7. Baked

    Baked Lifer

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    I always see assholes return barely used TV to Costco. And they never, ever, return w/ the box or manual.
     
  8. imported_Devine

    imported_Devine Golden Member

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    Because the majority dont abuse Costco.
     
  9. EvilYoda

    EvilYoda Lifer

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    Most people don't go to Cost Co for a TV...they sell tons of household products, food, clothing...and they're just plain awesome.

    That's why they make money, because they're awesome.
     
  10. BillyBatson

    BillyBatson Diamond Member

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    i worked in Major Sales (electronics, etc) at Csotco. Oldest TV i ever approved for return was an almsot 6 year old Sony 42" Plasma. They paid $8k for it but since they didn't have a receipt we gave them the most recent price int he system which was $5. They bought a 50" Pioneer and put like $2k in their pocket.

    There are ways we can deny certain returns other than computers. I know every way to return something to costco and even the rule with computers/laptops can SOMETIMES be broken under certain situations but it goes against the costco written policy.

    costco makes a lot of its money (i have heard fumors of 55% up to 95% lol) from membership dues. But also think about it this way, say you buy a TV for $2k and you keep it for a eyar and return it for another model. You are seeing it as costco just lost a ton of money when in fact they invested your $2k throughout that time, whether it be in stocks, mutual funds, whatever, or towards purchasing other costco products such as food that makes a profit. By the time they lose money on your return they have most likely turned a profit on your original purchase and see very little to no loss at all.
     
  11. Corporate Thug

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  12. wetcat007

    wetcat007 Diamond Member

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    Shouldn't they just be able to get rid of someones membership if they abuse the return policy?
     
  13. LordSegan

    LordSegan Diamond Member

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    Exactly, if you are habitually returning, you get dinged.
     
  14. JS80

    JS80 Lifer

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    actually, costco doesn't make that much money...their profit margin is less than 2%.
     
  15. BillyBatson

    BillyBatson Diamond Member

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    ithis is true to a point, it depends on the items.
    for instance they LOSE money on toilet paper and paper towels but it is an acceptable loss since a LOT of ppl come in for those items and almsot everyone walks out of the building with those 2... but a long with a lot of other things that costco does make a profit on

    theymight make .2 cents on something but if they sell tens of thousands of them a day, it adds up lol
     
  16. deftron

    deftron Lifer

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    Funded by the Dems and Hollywood Jews


     
  17. Liviathan

    Liviathan Platinum Member

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    I read that Costco is the largest wine retailer in the US.

    I've been a member for about 6 years, I've never returned anything.