Friday, June 08, 2007

Costco Customer Service - So close, yet so far away

While shopping for some critical items at Costco I finally noticed their customer service policy. Surprisingly, it was summarized as these three bullet points (and mentioned on the web too):

  • Membership: We will refund your membership fee in full at any time if you are dissatisfied.
  • Merchandise: We guarantee your satisfaction on every product we sell, with a full refund.
  • Merchandise Exceptions: Televisions, projectors, computers, cameras, camcorders, iPOD/MP3 players and cellular phones must be returned within 90 days of purchase for a refund.

I actually had to re-read these a few times to really appreciate what they were saying. The fact is, this is a most impressive customer service policy. The exceptions seem totally reasonable, and the rest of the policy is incredibly broad. You're telling me that I can buy a 30lb bag of rice, or $30.00 worth Salmon steaks, and I can trivially return them if I'm not satisfied?

The membership policy too couldn't be any stronger too. Way to go guys.

I had two takes-aways from this observation:

First, someone at Costco corporate really gets it. This policy is on par with customer service greats like REI and Trader Joe's. They have obviously done the math and realized that a happy customer is way more valuable than the cost of any products in their store. That's great.

Second, it's not nearly enough. While their policy is great, there's clearly a gap between that and my actual experience and perception of Costco. Even the cold and industrial way the policy is displayed makes it look more like a negative warning than a positive statement. I actually follow a terrific blog, Exerienceology, which is more or less devoted to understanding how gaps like this develop in companies. She even covered a whole series of articles on Costco itself.

The folks at Costco get big time points for having a great policy. Now they just need to close that experience gap, and they'd really be kicking butt.

Update: Paul had a terrific comment worth mentioning here:

Actually, the warehouse feel is part of the branding. It actually creates a feel of bargain hunting mirroring swap meet or flea market type settings. Also because of the no frills displays it lowers overhead on decorations and maintenance on all those extra signs and standees, etc. passing the savings on to the customer.

Excellent point. What's most surprising to me, then, is how their store is so bare bones, yet their return policy isn't. The return policy is all about going above and beyond, yet the store itself doesn't have that feeling to me. I guess the key question is, would it be a good thing for Costco members to have this sense? Perhaps the warehouse feeling is more valuable than the touchy-feely-Trader-Joe's feeling.


  1. Actually, the warehouse feel is part of the branding. It actually creates a feel of bargain hunting mirroring swap meet or flea market type settings. Also because of the no frills displays it lowers overhead on decorations and maintenance on all those extra signs and standees, etc. passing the savings on to the customer.

  2. You might try posting some of these thoughts on - it's a new consumer website where shoppers share experiences at the various stores they've been to (national chains and local shops).

  3. Anonymous1:52 PM

    I purchased two Skyway Rolling Gear Traval Bags yesterday at the Cost co store in Coeur d Alene Idaho.
    I had a concern about the large size of the bag (30 H x 15 W x 14 D) wanted to know if the bags would be acceptable on Air Line Flights. I called the 800 # on the box and spoke to the Manufactures Rep. I ask if the bags met the Most Common U.S. Airline "safe size requirements" the reply was " we do not provide that information.
    I then called Cost Co Headquarters and ask the same question.Their reply was they did not know and I needed to call the air lines for such information.I have been a member of Costco since 1985 while over all they are far superior at the store level the Headquarters has never provided me with reasonable explinations on any of my Questions.


  4. Anonymous6:52 PM

    I used the self checkout for the first time. I found the process completely confusing. The instructions where confusing the screen had too much advertising which made finding the instruction hard to follow. In the end an employee had to come over and show me how to check out.
    That's the last time I use the self check out.

  5. Anonymous3:30 PM

    Just don't stop your membership and then start it back up. You will be cheated out of a full year's membership. this PLACE IS A RIPOFF

  6. Nice post! I agree that, this is a most impressive customer service policy and I believe that with this policy this may became a successful one. Any customer wants to satisfied to the services that they need. Thanks for sharing.


  7. Anonymous5:01 PM

    Just don't expect ANY customer service. My first experience was that know one wanted to help, in fact no one did. Every tried loading, unloading and rolling a cart with a king size mattress on it around their store and to your vehicle, as a small woman? They did not help and acted put out that I needed help. I understand they are a warehouse but why sell something that large that you can't help the customer with?!?! As for their policy, it states that they are not allowed to help customers secure items for transport. Ever tried securing a king size mattress on a trailer alone? They wouldn't even hold one side of the strap while I tighted the other! My first experience with Costco was horrible and after 2 hours or more trying to purchase and load one single large item, all they could do is be rude and slap me with a printed version of their policy. I won't be back! I will stick with Sams Club.

  8. Anonymous9:50 PM

    My experience with Costco customer service has been one of sheer frustration. The customer service staff were inefficient, slow and overall showed a lack of interest in addressing customer's concern or cared about customer satisfaction. The only thing they were proactive about was upselling memberships. First of all I was given a gift card to spend there. I had already purchased a few items with the card in the past and upon my next visit they insisted on a picture ID which I didn't have at the time but provided them instead with two sets of IDs. Still they wouldn't budge and give a one day pass but instead casually told me to come back. I supposed they suspect people just find these cards and claim them as their own. They already have your money but they'll make you jump through hoops just to have the right to spend it! The policy to me is absolutely groundless because even with a picture ID how can they tell the card belongs to the person- the gift card# doesn't correspond with the person's name. I even had receipts to show that I had already bought items there using the same gift card. Membership with Costco- No thanks! Sam's Club is far better, friendlier and value your business more.