Succumbing to profit pressure from its open-ended return policy on consumer electronics, Costco has capped the time limit on CE refunds to 90 days.
The warehouse club hinted at the move last December when chief financial officer Richard Galanti said it would explore every alternative to reduce returns, including home TV installation and live tech support, before changing the customer-friendly policy. But the company ultimately pulled the plug after losing tens of millions of dollars in returns, mainly in big-screen TVs that consumers couldn’t operate or which they exchanged for better and cheaper models as prices fell.
The new policy goes into affect nationwide in April, and applies to TVs, cameras, camcorders, MP3 players, cellphones and PCs, which previously had a six-month return period. The time frame for returns of all other products — including CE items purchased prior to the policy change — remains unlimited.
In keeping with its customer-focused philosophy, Costco’s 90-day term still remains one of the most liberal in CE retailing, where a two-week window, often laden with restocking fees, is the norm.
In addition, Costco will extend the manufacturer’s warranty on TVs and PCs by two years from the date of purchase, and will expand its free Concierge tech support service from California to all markets, covering TVs, PCs, cameras, camcorders and MP3 players.