How does Costco make money with their liberal return policies?

[Reckoner]

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?

 

[KLin]

Membership dues

 

[mugs]

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.

 

[RossMAN]

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

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

 

[imported_gshock]

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

 

[A5]

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

 

[Baked]

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

 

[imported_Devine]

Because the majority dont abuse Costco.

 

[EvilYoda]

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.

 

[BillyBatson]

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.

 

[Corporate Thug]

Originally posted by: KLin
Membership dues

 

[wetcat007]

Originally posted by: mugs
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.

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

 

[Deleted member 4644]

Originally posted by: wetcat007

Originally posted by: mugs
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.

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

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

 

[JS80]

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

 

[BillyBatson]

Originally posted by: JS80
actually, costco doesn't make that much money...their profit margin is less than 2%.

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

 

[deftron]

Funded by the Dems and Hollywood Jews

 

[Liviathan]

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.