Does Costco Really End Memberships Over Excessive Returns?

For those who view grocery shopping, saving money, and delicious samples as some of life's greatest joys, to be a member of Costco is to be a member of an elite club. For merely the price of a yearly membership, which ranges from $60-$120 annually, you're afforded the privileges of shopping at one of America's top grocery stores, scoring sweet super-sized savings on household items and groceries, and of course, enjoying the store's wildly popular food court items. All this, and Costcos' prices have remained low even as prices nationwide skyrocket, adding extra incentive for shoppers to look for ways to save money at the grocery store.

Being a card-carrying Costco member is a privilege that affords you access to economical groceries and a wide range of other items like toiletries, household appliances, and even hotel stays and access to the store's cheaper-than-average gas. However, this privilege isn't necessarily a lifetime membership. The truth is, it can be revoked under certain circumstances, if shoppers commit one too many missteps, according to Costco's definitions. This specifically involves excessive returns. Want retail access to those sweet, sweet samples, low-low prices, and numerous other perks? Your best bet is to stay under the threshold of 70% returns — that is, if you're routinely buying and returning somewhere around 60% to 70% of all your purchases, you're in the danger zone of potentially having your membership revoked. 

The perks included with your Costco card aren't limited to the obvious — groceries and household items at great prices. Membership includes bonus benefits such as access to optical services and an in-house pharmacy, orders delivered to your doorstep, and even the option of taking out an exclusive members-only credit card offering cash back on purchases. Costco also has a generous return policy: Most products are allowed to be returned anytime after purchase, though some specialty products must be returned within 90 days.

But with all the perks Costco offers, it also reserves the right to withhold such privileges, should members abuse their memberships, such as by overdoing it on returns. The decision to cancel a membership isn't a black-and-white decision, nor is there just one faux pas you can commit to incur this penalty. The decision to terminate a membership (or not) is typically made by higher-ups such as managers, upon reviewing each case. 

You can decide you're displeased with the membership yourself and have it terminated, which can be done at any time by speaking to a crew member or calling a number listed on their website. Then there's the scarier-sounding route — when Costco itself revokes your account. Costco notes on its website that it has a "right to refuse membership to any applicant, and membership may be terminated at Costco's discretion and without cause." But in general, excessive return rates are a common culprit, as are disruptive or illegal acts such as shoplifting, committing fraud, or aggressive or impolite behavior in the store.

While Costco's steps to tamper down on excessive returns under the threat of revoked memberships may seem a bit harsh, the reality is that the rate of returns in this country has reached a tipping point. In a current climate of excessive consumerism, giant shopping hauls, and product unboxing videos, a habit of excessive returns in the U.S. has also spiked, as more shoppers opt to buy extra items and return what doesn't work. With changing consumer habits comes a catastrophe for retailers and for the planet, with as much as 40% of clothing bought online, for example, ending up returned. All too often, these items end up destroyed or in a landfill if stores don't have the capacity to repackage and resell. 

Most Costco shoppers are buying in person and are more likely to be returning spoiled produce or broken appliances than clothing that didn't fit. But all the same, Costco's policy is helping to slow the rampant cycle of returning, by encouraging customers to exercise more mindfulness in their shopping habits and stick to a reasonable number of returns. So while you're stocking up on all those must-have Costco pantry staples, as long as you also apply some common sense to your shopping habits, there's no reason you won't be able to continue to enjoy the spoils of your Costco membership for years to come.