Costco’s return policy is known as one of the most accesibles in the United States. Which is also why so many people trust in the brand.
Customers know that if they get a product and it doesn’t fit, yo got the wrong size or it came with a defect, you can just exchange it or give it back. But, do you know what happens with this products after they have been returned? The biggest assumptions is that they go back to the shelves… but do they?
Costco’s return policy—and why people rely on it so much
The supermarket offers a nearly-total satisfaction guarantee. What does this means? All members can return most of the purchased products without much fuzz. There are some exceptions, like certain electronic devices or special items, but in general, clients can get their money back even months after they have bought it.
For costumers this is highly positive, they feel backed up every time they buy something, either at the store or online.
For the brand is good too, because people hesitate less—and buy more—if they now that the store will accept the items back if something didn’t fit, or decide they don’t like it anymore after they have paid for it.
However, there’s another side to the story: That flexibility give confidence but it also creates a massive volume of returns that the company then have to manage strategically if they want avoid economic losses and waste.
Where do returns go?
It depends what’s the condition of the item that’s been given back. Although many people believe that is put on sell again, liquidated, or just returned to the manufacturer; truth is, not all destinations are as good.
If the items are non-perishable products, they haven’t been opened yet or in the case of clothing or accessories, for example they are on good shape, they can be put back on the shelves and sold.
However, used or opened products, like electronics or small appliances, are sent to specialized return centers. What happens in there? The products are reviewed and classify, and from there; many are sold to liquidation companies or auctions, where they end up in pallets with huge discounts. Others go back to the manufacturer, who sell them as “open box,” and then give Costco a pre-agreed credit for it.
There are also cases where the return products cannot be sold because of minor defects, and they are donated to charity. Toothbrushes or other personal products get recycle—for sanitary reasons.
But what about returned food? Yes, food can also be returned at Costco, but food safety standards in the United States are very strict.
Costco works with organizations like Feeding America and World Vision. And when non-perishable food products are still sealed, it might be given to food banks or local shelters.
World Vision has reported receiving hundreds of thousands of donated food pallets since 2014.
On the other hand, since perishable foods, like meat, fruit or frozen products, cannot be resold—even if they were never opened and within its expiration date—this products have to be thrown away.
Minimizing waste while giving costumers the option to return
The brand has focused on building a system that works for both the company and the customers. Most of the return items—besides perishable food—gets a second life.
At the same time, knowing that not all products have a destiny after you return it can help push for smarter purchases. It is good that Costco allows customers to return nearly everything, but maybe check twice before buying a product, it will reduces the possibilities of a give it back.