Costco Ends Lifetime Return Policy
It really doesn’t come as a surprise to me that Costco has ended their lifetime return policy because there were a lot of people abusing the system. I heard through a friend about one person who bought the largest high definition big screen TV Costco had simply to throw a Superbowl party with his friends this year. He returned it the next week. While that kind of abuse is still possible under the new Costco return policy, the updated rules help solve a costly abuse problem that was becoming rampant and costing the company quite a bit of money.
Electronics tend to fall in price rapidly when new generations appear and the life-cycle of each generation is fairly quick. What people started to do was purchase the latest generation electronics, then return it in six months to a year, get a full refund and then purchase the next generation gadget that was usually more powerful and cost less money - leaving Costco with an outdated product it could no longer sell.
The new return policy (pdf) for electronics is 90 days, but still remains much more liberal that many other stores’ return policies.
It’s a shame that they had to change the policy. They are a great example of a company that treats their employees and customer’s right, but get rewarded by having customers abuse the system. The sad fact is that if people continue to abuse the system, it will hurt all of us with tighter return rules. Quite unfortunate…
Costco’s liberal return policy was one of the main reasons I used when purchasing electronics items. I think this change might be a bit more drastic than required.
Here is a personal example: I bought a 20″ TV-VCR-DVD player in 2003 for $399. Approximately 13 months later, the DVD portion failed. After I inquired, Customer Service recommended I return it. I would have been thrilled to receive a replacement, even if refurbished. Costco refunded my money ($399) and I promptly purchasaed a newer model for $299. My intention was to have the issue resolved under Costco’s policy. It seems that they did not police their policy well.
Of course, this new policy does not protect Costco against the consumer that borrows a TV for the Super Bowl. I would not be surprised if Costco decided to create a new 5-year extended warranty plan on electronics that, for a fee, will allow a consumer to have the same ‘lifetime’ treatment over the first five years of a product’s life.
I think Sam’s Club has a similarly liberal return policy. In fact, it was advertised to me when I was shopping for flat panel TVs a year ago.