LAT: Costco halts liberal electronics return policy

[DeepModem Mom]

Costco halts liberal electronics return policy
Refunds were costing the warehouse store chain 'tens of millions of dollars' a year.
By Leslie Earnest and Adrian G. Uribarri, Times Staff Writers
February 28, 2007

It was a return policy made in shopper heaven, but it became hellish for Costco Wholesale Corp.

Customers at the membership warehouse chain could buy a snazzy big-screen TV, use it indefinitely and take it back anytime. They could use their refund to buy a newer model — often for a cheaper price.

Costco's generous policy was a big hit with consumers. "It was probably the best return policy in retail," said Jamil Brush, a 30-year-old Los Angeles claims examiner. "They pretty much would take back anything."

But even grateful shoppers suspected that others were abusing the policy. After all, Brush added, "what, basically, would stop someone from buying something, using it for a little bit, and taking it back?"

This week, after losing "tens of millions of dollars" annually on the policy, Costco said enough.

Its return policy for consumer electronics was cut to 90 days in California. The policy will take effect nationwide over the next month. The changes come as many in the industry are rethinking return policies....

http://www.latimes.com/business/la-fi-costco28feb28,0,7973536.story?coll=la-home-headlines

[kansasblue]

1. only taking returns from Conservatives!

LOL

[Robbien]

2. The old return policy is insane

A person could return electronics any time? No matter how old it was?

That is insane. The new 90 day policy is generous enough.

[Ian David]

3. 90 days is PLENTY of time to shoot your low-budget student film and then return the cameras. n/t

[harpboy_ak]

17. But NOT long enough for internal hard drives!

I've frequently upgraded computers with drives from Costco, which is the cheapest place to find a limited selection of internal hard drives when they have them in stock. I've had drives from Costco fail over a year after purchase, and after determining that it's not a controller problem, taken the drive, packaging, and receipt to Costco's customer service, and had our company's account credited with the return, then picked up another drive (different manfacturer!) twice the size for about the same price, put it on the company Costco account, and installed it.

90 days is not enough time for a hard drive warranty. I'll sure be looking over the Costco packages to make sure the manufacturer warrants it for at least a year.

[chelsea0011]

13. I bought a plasma tv last year from Costco and when I asked what

the return policy was. When he stated I could return it anytime at all in the future, I kept asking, "seriously, what's your return policy?" I left the store thinking this is one brilliant company or they're going down.

[tridim]

4. My neighbor did the "use it and return it" thing several times

and I told him to knock it off because eventually honest Costco customers would be punished. Well, here we are.

[KT2000]

12. Nordstrom had a return policy

that would allow people to keep returning shoes - time after time. People thought they were getting away with something until they were eventually notified that Nordstrom did not want them as customers any more and to stay out of their stores.
Ha!

[jollyreaper2112]

5. typical

Leave it to the jerks to ruin it for the rest of us.

[AllexxisF1]

6. About Damn Time.

I worked at Costco for 8 years through College and four years after. I was a Refunds and Marketing manager for two of them. Take it from me I have taken back everything and anything in my tenor there. It is a great policy, and believe it or not, Jim Sinegal himself told me to my face when I brought this issue up to him back in 1999. Members who purchased Packard Bell 90Mhz Pentium computers for $3,500.00 were returning them in droves 5 years later for the entire paid amount and going on the floor picking up a new Sony Vaio Pentium 3's for $1,200 when prices came down. Jim's exact response to me (yes to me, the guy makes a point to visit every single warehouse twice a year and meet with employee's) his response was simple, our members deserve the peace of mind knowing that they can return anything. Sure we may loose $1,000 bucs but we have also kept them as constant returning members for five years, not to mention used their $3,000 dollars to invest ourselves in new warehouses.

I have taken everything back from underwear to food to big screen tv's and frankly Jim is absolutely right. You treat customers and especially employees well (like Jim always has) and you will find success.

I don't blame them for altering their policy for electronics because frankly it did get way out of hand.

The worst offenders in my book have always been the Church society people who would buy tons of food for gatherings and parties, than afterwards return what was left over. We could not, in good conscience, put food that has left the store back on the shelf, so it would have to be thrown away. Every day the rest of the members in line would see me throwing all this food away and berate the person returning it from some church saying, why don't they donate it to some soup kitchen instead of getting their money back.

Costco is by far one of the best American companies period. I was there since the Price Club days and learned how business is really run from some really talented leaders. Costco gave me a phenomenal success in my 401K, Help pay for my first home, college and more importantly getting me ready for business in the corporate world.

I miss that place from time to time, because it was a truly remarkable company to work for. There is nothing more adrenalin pumping than running the entire front end staff during a holiday weekend yourself with 400 people bearing down on you, talk about stress....and I loved it.

[DeepModem Mom]

9. Thanks for this inside view, AllexxisF1! nt

[Scout1071]

16. Terrific commentary. I'm grateful for your insight.

It sounds like a relatively good experience for 12 years and I'm sure it has propelled you to greater success today. Congratulations. I have worked many live events and in retail and I understand the stress. It's a bit of an adrenaline addiction.

Welcome to DU.

[Lisa]

18. wow -- people actually used to return food when there was nothing wrong with it ...

... and expect the store to cover for their poor planning?

And claiming to represent a church, too! The chutzpah of those folks (going cross-cultural for a moment there). And to think that even St. Augustine believed that churchiness could not be used as an excuse for dishonesty in commercial transactions (like the time he slammed the guy who had his way with a prostitute, then refused to pay on the grounds that selling sex was immoral).

I guess it never occurred to them to share the leftovers among the less-well-off members of the congregation, or -- as those other customers suggested -- drive a carload down to the homeless shelter.

AllexxisF1, you have my sympathies ... Refunds and customer service people have to cope with so much abuse, even when their bosses back them up.

[Duer 157099]

7. What does this mean:

"The new policy won't affect items purchased before Monday."

So, everything that I have already purchased is still returnable indefinately?

I love Costco, and their return policy is the main reason I do most of my shopping there.

Also, I wonder what this comment means:

"The policy change was no surprise to Mike Lopez, a police officer shopping at Costco's Atwater Village store Tuesday. When a plasma TV he bought in 2004 started losing color last year, the Glendale resident returned it with "no questions asked."

"It was awesome. It was great," Lopez said. "It didn't take a rocket scientist to figure out that someone was going to abuse it eventually."

Is Lopez saying that somebody *else* was going to abuse it, or that he himself was abusing it?

I learned about Costco's policy by the people at the return counter themselves -- I was returning a DVD player that stopped working, and I commented that this was the 2nd one I had bought that had failed, and they said to return the other one -- I told them that I had gotten it several years ago, and they said, so, that's fine, return it -- which I did. Ever since then, I have only gotten my electronics from Costco, knowing that if it failed, I could return it. At first I felt a bit guilty about it, thinking it couldn't be right, but it was Costco themselves who advised me to do it, so I did, and in return, they got an extremely loyal customer, and not just for electronics, but for everything else (heh, it would never even occur to me to return FOOD, lol...)

[nolabels]

8. 90 day return policy is stupid

It should be 30 days max :shrug:

My guess is most people don't use the retail outlets as free rental centers but for those who do, tough luck and too bad for you :P

[brentspeak]

19. Agreed

I want COSTCO to do well, but their way-too-lenient returns policy definitely hurts them. I want to see Mall-Wart go out of business, not COSTCO.

[JackCo]

10. My fil bought

a 50-something inch big screen before Thanksgiving. After a couple of weeks the sound was screeching. He took it back got a Vizio 42" plasma. Well in January the color messed up on it. So he done another return but got the same model. Hopefully this one will hold out much better.

For that reason I loved their policy. We had to take back a Panasonic LCD we got last year bc the sound card went out after a month. The employee told us alot of customers had returned that particular model for the same reason. We opted for a Vizio 42" LCD. It has been great.

[Dr.Phool]

11. I hope it's good too.

I just bought a Visio 42" LCD at Costco about a month ago.

[johnnydrama]

14. It was smart for Costco to allow the returns

Just to get in the picture of people buying big ticket electronics there.

Who would think to go to a costco to buy a 50" plasma?

How many threads have you seen on forums where people say they went and bought a big TV at Costco solely for the return policy.

Now only a few % of those people would abuse the policy, so it helped get Costco in the door.

I think people now know that Costco has a good selection (mostly online) and good prices, and the return policy
isn't needed any more.

But i'm sure it made them money in the long run.

[DeepModem Mom]

15. Thanks for posting, Jack -- welcome to DU!

[frylock]

20. i had a friend who turned in a vizio hi-def after a year..

there was a fan making some noise. They took the TV back, no questions asked, and he upgraded to a nice Samsung model.