The Problem With Good Customer Service

We cancelled our Costco membership today. As an event planner, this was a tough decision to make. Costco’s poor customer service made me not regret it one bit.

Costco is known for it’s liberal return policy. This comes in handy when you produce events where food and drink are supporting characters. On average, for a single event, I make four trips to Costco: three of those trips, I usually spend several thousand dollars, and then the day after the event, I make returns on the food and drink that wasn’t opened and wasn’t used. Since running out of anything is never an option, I always overbuy.

We found out today, via a customer service rep pointing to a paper hanging on the wall behind the customer service desk, that Georgia state law prohibits returns on alcohol. Since this sign was not hanging by the beer that we purchased, and we do not live in Georgia, we were apparently supposed to know to look at a sign behind the customer service desk. You know, the one everyone passes AFTER they’ve checked out and paid the cashier. At which point, even if we had decided to be more conservative about how much alcohol we might need, we wouldn’t have been able to return it anyway.

We asked if we could return the beer to a different Costco location, not in Georgia. They gave us the phone number to a store in Tennessee. The person answering the phone there said beer was the only thing that could not be returned to any store other than the one where it was purchased.

In our case, the store we were standing in that refused to take the return.

Costco’s website mentions nothing of that very specific policy. They do mention that they don’t accept alcohol returns where prohibited by law, but don’t bother to list which stores are in places that have laws prohibiting said returns.

In the business world, it’s sometimes difficult to get employees to understand that you shouldn’t cut off your nose to spite your face. We were not just annoyed at the inability to be able to return something at a store that is known for accepting returns on products years after they’ve been purchased — if there’s a law, there’s a law — but at the fact that the onus was now on us to attempt to come up with some sort of solution.

So, armed with the knowledge that there is a Sam’s Club that is closer to our house and closer to all of our events, we exercised Costco’s most valuable return policy: we asked for a refund on our membership fee.

When we originally purchased this beer a week ago, we also got Costco’s new credit card. The luxury of having good credit means it was no big deal for us to also cancel that card.

So, for the cost of a couple of minutes of calling around to a store or two in nearby states (which we were going to have to pay for the gas to transport a dozen cases of beer), and printing of a sign to hang by the alcohol to prevent this from happening again, Costco lost our membership fee (and our future membership fees), revenue from us using their branded credit card, and revenue from future purposes, which total in the tens of thousands on a yearly basis.

Customer service is a dying art form, particularly at huge companies like Costco, where the profit from us shopping elsewhere is a drop in the ocean to them. Would calling around to find a store where we could return the beer be considered going above and beyond? Were we asking for too much? As a small business owner, I know that taking the extra step to show customers that you value the money that they hand over to you is not only expected, but it has the benefit of making for more loyal customers.

There are plenty of places in the area where I can buy beer, burgers, chips, and sodas for events. Maybe one of them will appreciate my money more than Costco does.