What Does Costco Do With Returns? [Food, Unused & More]

Costco customers return items every day, so what does Costco do with the returns? Are they repackaged and sold? We'll answer all your questions here.

With over 105 million active Costco customers worldwide, it’s fair to say that the retailer gets a fair amount of business across their 800 plus stores across the globe.

But, with so many people shopping both through the Costco website and in-store, it isn’t uncommon for customers to return products back to the retailer in case the product is damaged, no longer desired, or is an unwanted gift.

The truth is that Costco customers return items every single day and for a variety of reasons. And thanks to the lenient Costco policy, Costco customers are actually encouraged to return products as long as it is within reason.

But, what happens with Costco products once they are returned? Are they repackaged and sold as new or are they discarded?

In this article, we will answer all such questions that you may have and more.

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What Does Costco Do With Their Returns In 2022?

Costco store 3

As of 2022, when an item is returned to Costco, the retailer will repackage and list up for sale the returned products at a discount.

If a particular product was returned because it was damaged or no longer works, Costco sends those to Grade A/B liquidation auctions. As for groceries, they’re just disposed of.

Do note that all Costco items that have been returned have met the eligibility criteria to be returned. This means that the item is like new, undamaged, and Costco believes that if sold, it can still satisfy the customer. This doesn’t apply to food.

What Is Costco’s Return Policy As Of 2022?

Costco has a very lenient return policy for most of the products they sell. This is because they want to make sure that every single one of the customers is 100% satisfied at all times.

Generally speaking, Costco items can be returned up to 90 days of purchase. If you try to return an item later, chances are that you won’t be able to do that unless you have a good enough reason.

What Does Costco Do With Returned Food?

A hand holding a Costco Membership card on a cart in Costco warehouse.

As mentioned earlier, for health and safety reasons, Costco does not repackage or sell food items that have been returned to the store. Groceries that are returned to Costco are generally disposed of.

That includes chicken, fresh fruits and vegetables, eggs, frozen meat, and more.

If a customer returns a food product, they will still get a refund but Costco will take the loss as they won’t try and resell the product again.

What Does Costco Do With Defective Returns?

If a customer returns a product after purchasing it and realizing it was defective, they will get their money back and Costco will accept the return even if the customer has bought a Squaretrade warranty. In most cases, defective items are resold at liquidation auctions where businesses buy, refurbish/repair, and sell the product.

Once an item is recognized as defective, it will never make it back to the Costco shelves even if it has been repaired and is in full working order.

What Does Costco Do With Unused Returns?

Costco Store

Quite often, Costco customers buy presents for their friends and loved ones from the retailer. Unfortunately, sometimes, the gift isn’t wanted and is returned to Costco.

In most cases, the gift is unused and unopened, in which case Costco check if the product has been tampered with and if not, they will list it back for sale as new.

Since Costco has a customer satisfaction guarantee, selling returned products for their original price only happens when the product at hand has not been opened or used at all.

What Does Costco Do With Used Returns?

In many cases, Costco customers return items after realizing it was the wrong size or color, regret the purchase, or are not satisfied with the product as a whole.

But, now that the item was used at least once, what does Costco do about that?

Upon requesting a return, the Costco employees on the day will inspect the item’s condition and check if it has been damaged in any way.

In most cases, the item will either be sold at Costco at a discounted price or the retailer will simply resell it at a liquidation auction.

This doesn’t include food, medicine, and hygiene products. If the return is accepted, Costco will dispose of the product.

What Are The Costco Liquidation Auctions?

Hobart Circa May 2018: Costco Wholesale Location. Costco Wholesale is a Multi Billion Dollar Global Retailer IV

Items that are damaged or have a manufacturer defect will be sold to companies that purchase Grade A/B and Grade C/B items. These companies basically buy items that are no good and refurbish them and resell them for profit.

Costco does have a policy that prevents companies that buy such items from entering circulation again within Costco stores.

What Products Cannot Be Returned To Costco?

Though most items can be returned to Costco, there are some exceptions to the rule. Once purchased, you cannot return:

  • Cigarettes
  • Alcohol
  • Limited lifetime products like batteries and tires
  • Customized items

For electronics, furniture, appliances, and everything else sold at Costco, your eligibility to return an item even without receipt 90 days after purchase will be revoked. This is to prevent customers from taking advantage of the already generous return policy that Costco has in place.

In some cases, however, if it has been over the 90-day period and you believe to have a valid reason for a return, Costco will consider your case and go from there.

Conclusion – What Happens To Costco Returns?

The fate that a particular product faces once it has been returned to Costco depends on what the product returned was. If it was an electronics item that was bought as a gift but isn’t wanted, that will be resold at Costco at a discount.

If you’re returning a packet of salmon because it has gone off, Costco will discard the product and refund you the money.

In other cases where the product is defective or damaged, it will be sold at liquidation auctions for fraction of the price.

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Arthur Beringer

Arthur graduated in 2002 with a Master's in Business Administration from LSU Alexandria. After working in the retail industry for almost 20 years, he decided to quit and write full-time to help readers who are searching online for consumer-related answers.