Costco Holds to Member Friendly Return Policy
Costco, it is well documented, is not the typical retailer. While all claim to be focused on the customer, it is one retailer that demonstrates that commitment in clear and simple turns on a daily basis.
One such example is the warehouse club’s return policy. Costco guarantees all the products it sells and will accept returns from customers even if the item has been used for an extended period of time. Shoppers have the option of a refund or store credit when they bring product.
Of course, with such a broad guarantee there are bound to be people who will take advantage. A report on the Daily Tech web site relayed the story of one shopper who returned a digital camera after four years of use. After receiving a full refund, the same shopper proceeded to buy a new camera in the club.
While there are examples of club members using Costco’s return policy to the detriment of the retailer, those instances are called rare. An unidentified Costco associate told Daily Tech, “Sometimes we’ll get the odd return of a product that we haven’t carried for years. Customers are usually returning defective products and want a replacement. It’s not often that we get someone trying to get their money back for something that’s really old.”
The one area where Costco has found it has had to place a time limit on returns is personal computers. In 2002, the company instituted a six-month window for consumers to return defective items.
“We’ll take anything back without batting an eye, except for computers,” said an unidentified warehouse store manager. “We don’t really like seeing TVs that still work fine come back after a year, but we’ll accept something if it’s broken.”
Richard Galanti, vice president and chief financial officer of Costco, said there’s no reason to change the company’s policy. “For every customer that abuses that privilege, there are 99 other customers that go, ‘Wow.'”
Discussion Questions: Why do so many retailers, implicit in areas such as product returns, behave as if their customers are out to cheat them? Do return policies contribute to whatever sense of “loyalty” shoppers have for a particular store?