It was a return policy made in shopper heaven, but it became hellish for Costco Wholesale Corp.As a Costco member since 2000, it's a mixed bag for me. I've bought some electronics, including DVD recorders there, that I have had to return because of malfunctions, so I have been able to return them instead of being stuck with a paperweight, and/or wait for a repair.
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.
However, other retailers have a lot more selection, and sometimes, better sale prices. I got a Sony DVD recorder, which for me so far has been ultra-reliable, though not from Costco.
Above all, I realize that Costco is a business, and while it's nice to have a lenient return policy because things can break after a little while, people do abuse it (although a small percentage). Because they are a business dedicated to cutting costs to deliver a low price as possible, I respect the decision.
Side note, Costco's biggest competitor, Sam's Club, still has a 100% percent policy, except on computers, which is six months. Costco itself went to a 6-month policy for computers not too long ago.
