Costco finally cries Uncle!

[wabmester]

Well, we knew that the abuse of Costco's return policy couldn't last, so they finally changed it.

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People had been returning TVs they had bought for $2,000 last year and turning around and buying the same TV for $1,200. This is patently abusive, but Costco didn't want to change the rules for everybody just because a few jerks were, essentially, stealing.

 

[Craig]

... she was disappointed because she had heard Costco was going to stop its "free TV upgrade policy."

Ya gotta love some consumers ...

I've worked in retail much of my life, and our base philosophy is always to satisfy the customer. But, there are thieves and idiots out there, and a smart retailer ... who wants to stay in business ... has to be able to discern the difference between a decent, honest consumer with a problem, and a leech.

"Warranty does not mean we will replace it if it's run over by your car," Galanti said.

Good CFO.


Now, I like CostCo even more.

 

[Texas Proud]

Sorry..... but I don't think it is 'stealing' if you follow a policy of being able to return something under a rule THEY made up... Was it a stupid rule, of course...

Let me give an example.... You go buy a product today.... and NEXT WEEK, someone advertises for half price (like $2,000 to $1,000)... how many on this board are NOT going to return that product OR, go ask if we can get the $1,000 back (the policy of some other stores)... if you say 'yes', then are you 'stealing?'....

Do any of you remember Woolco I worked there for a very short time... but they had the same policy and it hurt them a lot... we had people who would buy a weed whacker or lawn mower, use it for the season and then return it in the fall for a full refund!!!! It was the policy!! We all knew that the product still worked.... just that they wanted their money back... they are long gone from this world as they never did change their policy...

 

[Empty Pockets]

These companies had great intentions, they just underestimated some people's self pride & personal ethics.

 

[cute fuzzy bunny]

It'd have been nicer if they just said "no" to the stupid return requests.

I've had a few 'long term' costco returns. Bought a set of their pans and the exterior annodizing started coming off a year later. Sheepishly I called and asked about it and was told to bring them back for a new set.

I also "discovered" the extra set of christmas lights I bought in August. They took them back, no questions asked.

 

[saluki9]

These companies had great intentions, they just underestimated overestimated some people's self pride & personal ethics.

There, I fixed it for you.

 

[Empty Pockets]

Thanks, that's a 12th grade public education I'm working with here.

 

[TromboneAl]

Wait a second, here's another take on this:

Costco wasn't being nice or noble with their original long-term return policy. They did it to attract customers; they did it to compete. Perhaps when they discussed this policy in a meeting, someone said:

"But, wait, some customers are just going to return a TV a year later so they can upgrade."

with the reply,

"Yes, some people will do that but most won't, and maybe people will buy intending to do that, but will be too lazy to follow through. In any case, we'll get so many customers this way, that it won't matter if some return their electronics at our expense."

In other words the policy was a type of loss leader, and if someone takes advantage of it, they're not necessarily a jerk.

I'm not convinced that Costco's original policy was altruistic.

 

[ziggy29]

I'm not convinced that Costco's original policy was altruistic.

I'm not sure it was. either. It's a business decision. Customer-friendly business decisions can certainly increase your customer base, but at some point you have to ask whether that justifies the "cost" of such policies. Costco presumably decided that the price to pay was too high.

My mom worked at a K-Mart for about 15 years. They used to take back *anything*. Even clothes that were well-worn and years old. With cash refunds. I suspect a lot of people went to thrift stores and bought old clothing for 50 cents and went to K-Mart to get a $10 cash refund. Not sure how this could have been a profitable business model, pretty much ever.

 

[free4now]

I think costco did the right thing. But I also am clear that their return policy is a business decision calculated to get them more business.

I recently returned an answering machine to costco... I had bought it about 6 months ago, and it took a while before I noticed it had a defect of cutting people off in the middle of their leaving a message. I tried to resolve the problem with the manufacturer but they wouldn't or couldn't fix it. I felt very good about being able to return it to costco for a full refund, even without the box or receipt. The goodwill they earned by accepting that return definitely will earn them a lot of future business from me.

 

[Texas Proud]

Remember... Sears has a lifetime warrenty on their tools.... if it breaks, return it for a new one...

However, I don't belive the new ones are built as well as the old... just me.. but, we have done it with a screwdriver that decided to get fried on a car battery terminal for some reason no questions asked, just handed us a new one.. but this is not an electronic device that has a history of lowering prices over time...

 

[ziggy29]

I think costco did the right thing. But I also am clear that their return policy is a business decision calculated to get them more business.

Obviously, as a business you want to satisfy the customer and keep their future business. At some point, though, you weigh whether or not the cost of satisfying a customer exceeds their likely future contributions to your bottom line. Not all customers are "good" customers; some actually COST money to keep. Managers and executives need to make this call quite frequently, and not just in the retail sector.

 

[cute fuzzy bunny]

If costco wasnt one of the better employers around, I'd question the 'altruism'. Having been one of their shoppers for nearly forever, I've found they are quite customer and employee centric. I feel good buying from them.

 

[TromboneAl]

With a lot of businesses, including my own, I recognize this trend. The business has a very customer-beneficial policy and then later decides that it's not quite worth it.

It seems like Staples had a lot of Free-After-Rebate offers in the past, but very few now.

In my own business I had allowed customers to upgrade to more users one at a time. But after dealing with some companies that would upgrade from five users to six, and then six to eight, etc., I decided it wasn't worth the hassle, and forced them to upgrade to certain levels (e.g. 10, 15, 25, 50).

 

[TromboneAl]

As long as Costco continues to have free samples of Aussie Bites, cheese-cake, cream puffs, etc from the hairnet brigade, I'll continue to shop there.

 

[lets-retire]

Remember... Sears has a lifetime warrenty on their tools.... if it breaks, return it for a new one...

However, I don't belive the new ones are built as well as the old... just me.. but, we have done it with a screwdriver that decided to get fried on a car battery terminal for some reason no questions asked, just handed us a new one.. but this is not an electronic device that has a history of lowering prices over time...

They don't do it for any thing that has a motor, even if the part that broke is mechanical. I won't ever buy a Craftsman tool with a motor, because they wanted me to replace a rubber sawdust elbow that came apart at the seem. There are much better tools with motors at a better price than Craftsman. Hand tools are another thing all together. I've never had a problem with returning them.

 

[terminator]

Does Costco really absorb the cost of their return policy? I sell to BJ's (warehouse club in the northeast) and they chargeback all returns to us. They hold back a large percentage of their payments so they have money there they can use for deductions even many many months later (i.e. sometimes it is up to eight months before we get paid-in-full). So in my limited experience (over many years) with one warehouse club chain, returns don't cost them anything. And I've always assumed the same applies to Home Depot, WalMart, etc. I assume they just pass the cost back to the manufacturer. Of course, the twelve month return on TV may be an exception to the manufacturer chargeback and I assume larger manufacturers have more power to say "no."

 

[cute fuzzy bunny]

As long as Costco continues to have free samples of Aussie Bites, cheese-cake, cream puffs, etc from the hairnet brigade, I'll continue to shop there.

No kidding. I cant walk into a warehouse store without Gabe pointing at the free food sample area wildly and yelling at me to go get him some snacks. He's in love with the people that hand out the sample stuff.

 

[Sarah in SC]

Terminator, that's what I was thinking as well. Our farm used to sell to grocery stores (Food Liar being the worst) and we always absorbed the cost of any returns--which were never even returned TO US, always disposed of in some fashion that only the store warehouse knew about....

Sarah

 

[Empty Pockets]

Free food is a great little customer service.

When I was a kid there were two little grocery stores in my home town near our farm. One was owned by a nice little guy named Jimmy. When mom wasn't looking he'd flip you a little piece of candy from behind the counter. The other store in town was bigger & nicer, but when we were riding loose in the back of the old Buick you can bet we were hollering "Let's go to Jimmy's". The meat market next door gave kids cold weiners right out of the cooler. I miss those days.

In a small town it doesn't take the businesses long to learn who cannot be trusted, and word gets out. There was a guy who bought two spark plugs for his tractor at the John Deere dealer, and a week later returned the boxes for a refund (with the old spark plugs in them). From that day on he was cash & carry at every place in town with no returns allowed. 35 years later people still talk about it.

 

[Texas Proud]

In a small town it doesn't take the businesses long to learn who cannot be trusted, and word gets out. There was a guy who bought two spark plugs for his tractor at the John Deere dealer, and a week later returned the boxes for a refund (with the old spark plugs in them). From that day on he was cash & carry at every place in town with no returns allowed. 35 years later people still talk about it.

NOW... that is a small town....

 

[Texas Proud]

No kidding. I cant walk into a warehouse store without Gabe pointing at the free food sample area wildly and yelling at me to go get him some snacks. He's in love with the people that hand out the sample stuff.

And how many people actually go to the store and ONLY eat It is a way they can get you in and sell you 'something'.... probably cheaper than advertising in the paper or TV..

 

[youbet]

In a small town it doesn't take the businesses long to learn who cannot be trusted, and word gets out.

My folks retired to a small town in Arkansas where my mom was originally from. In the mid-80's, our house in the Chicago suburbs was broken into and one of the missing items was a spare key to their safety deposit box at their local bank. I called the bank to explain and to have the locks changed. My call was transfered to the bank president who said: "Mr. youbet, I know your folks, everyone here at the bank does. We'd look forward to meeting anyone who came in with their key and tried to present themselves as being your folks! Don't worry about changing the locks."

Just one of the little advantages to small town life I guess.........

My folks are gone now but I still visit down there as the town is near two of my favorite trout fishing rivers, the North Fork and the White. It's totally different today. I'm sure some drone at the bank (now a branch of some Little Rock bank) would have just told me to send $50 and they'd change the locks.

 

[TromboneAl]

...pointing at the free food sample area wildly and yelling...

What a coincidence, that's exactly what I do.

 

[cute fuzzy bunny]

And how many people actually go to the store and ONLY eat It is a way they can get you in and sell you 'something'.... probably cheaper than advertising in the paper or TV..

No ****. I was in a costco down by my dads house (miles and miles o' subdivisions as far as the eye can see) and you couldnt even get your cart through the quarter of the store in the back where they were giving out the samples. There was a whole fleet of vultures standing in front of a couple of them grabbing pieces of ham and pizza slices and then circling back around again.

After having to ask the fourth person to get the hell out of my way, I loudly asked "Dont you guys think you should get a fake mustache or a different shirt or something to use for your third or fourth trip? You do know the whole slice is only a buck and a half WITH a drink, right?" Everyone looked embarrassed and the servers all tried hard to stifle themselves...