Costco Is Refusing Returns on Hoarded Items  

By Tom Ryan


Costco recently began posting signs indicating that it will no longer accept returns on six items — toilet paper, paper towels, rice, water, sanitizing wipes and Lysol — that consumers have been stocking up in response to the coronavirus pandemic.

The signs in recent days began popping up on social media on non-affiliated Instagram sites such as Costco Insider, Costco Buy and Costco Deals. It’s uncertain whether the initiative is nationwide.

An employee at an Illinois Costco warehouse told Business Insider that the non-returns policy was for both sanitary purposes — to avoid the risk of tainted returns — as well as to discourage hoarding.

The move was praised on social media.

“This is such great news! I’m tired of all those people that buy toilet paper and think they can just return it later when they don’t need it,” one individual responded to an Instagram post.

“It’s about time! Too many people taking advantage of their return policy,” another said.

Costco in early March began placing purchase restrictions on certain items due to panic buying. CFO Richard Galanti said on Costco’s second-quarter conference call on March 5, “We’re getting deliveries daily. But it’s still not enough given the increased levels of demand on certain key items. It’s been a little crazy.”

Many stores are closing early to provide time to clean and restock stores. Costco and others are dedicating their first hour of opening to seniors and those with compromised immune systems to, not only help them avoid crowds that leave them susceptible to COVID-19, but to also give them a first shot at restocked assortments.

The ongoing hoarding has again led to some arguments that prices should be allowed to rise so supply and demand can reach equilibrium, although critics feel such a free-market solution would be detrimental to lower-income households.

Many government officials and store leaders are still trying to get out the message that hoarding isn’t necessary since grocers remain open and are continually restocking.


Discussion Questions:

Do you agree with Costco’s move to refuse returns of products that have been hoarded during the coronavirus outbreak? Do you see any other solutions to limit hoarding?


Comments from the RetailWire BrainTrust:

The fear that people feel is real and they need to control something in their life right now and it appears to be relieved by hoarding. It’s toilet paper in the U.S., pasta in Italy and rice in china. It is an almost universal phenomenon. But it isn’t rational. There is plenty of these items for everyone if people would just calm down but they can’t because they need to control something in their lives. Costco and now others need to step up to stop the madness.
Ken Morris, Retail industry thought leader

YES. Public safety is the primary concern and for anyone who has hoarded goods and then wants to return them, I say too bad. Returning product that might have been exposed to the virus could help spread the virus. It’s well within retailers’ rights to limit quantities and I think retailers should impose limits on fast moving goods. – This will ensure supply for others and minimize hoarding.
Mark Ryski, Founder, CEO & Author, HeadCount Corporation

I thought this was a very good move and people who were attempting to profiteer or hoard just for the sake of hoarding deserve to get left stuck with a lifetime supply of goods they can’t return. I also think Costco and others who can should put limits not just on single-visit purchases, but on repeat buying. Like, “you have exceeded your monthly allotment of toilet paper” in addition to “you can’t buy more than two packs today.” They have the data and shopper visibility to do it. An uncontrolled free market leads to people getting shot in parking lots or aisles. Let’s not let it get to that point!
Nikki Baird, VP of Retail Innovation, Aptos

As long as customers are able to purchase these items, I agree with not taking returns. But what if, for example, a customer hoarded, felt badly about it, and tried to return items so others can buy them now? These items are still in short supply. Most Costcos have them, but they are limit-one. I’d fully agree with the policy if it were time-bound (i.e. returns won’t be accepted after Friday, March 27).
Bethany Allee, Executive Vice President Marketing, Cybera

Costco is right. Hoarding is bad enough, but trying to return unused items and adding to the pressure on retailers like Costco is beyond the pale. If hoarders find themselves with an excess of product, I suggest they give it away to the vulnerable and needy.
Neil Saunders, Managing Director, GlobalData

Kudos to Costco. Retail was very late to the game to implement any measure of sanity–this is one reasonable move. Additionally, hoarders can eventually use the items or hopefully donate them where needed. If that’s an inconvenience or a financial hit, maybe they will learn better behavior as a result.
Ken Lonyai, Consultant, Strategist, Tech Innovator, UX Evangelist

Yes, limiting returns is a smart policy, especially in this time of urgent need. Perhaps more important is Costco recognizing that there are different needs for the senior community than the rest of their other shoppers. Perhaps reserving the first hour for just seniors is a good thing that Costco should keep in place from now on?
Kai Clarke, CEO, President- American Retail Consultants


Read the entire story and RetailWire discussion at http://bit.ly/2ULEku2

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                                                                         Early April 2020
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