What Really Happens To The Things People Return At Costco?

Costco is known for its generous return policy, which allows its card-carrying members to return almost anything without hassle. After all, the return policy states, "risk-free 100% satisfaction guarantee." Beyond a few notable exceptions, the purchase price of any item will be reimbursed for any returned items that customers are not happy with. But have you ever wondered what happens to all those returned items?

The journey of returned items at Costco is not so simple, especially because the warehouse retailer sells items throughout many different categories. The type of product, whether it is perishable or not, and its condition determine where it will go. For all returned items, the first step is for Costco employees to inspect and assess their condition.

If the product is non-perishable, unopened, and in perfect shape, this is a straightforward decision: It is likely to go right back on the shelf. Some items, like toothbrushes or other personal hygiene items, are unsanitary to resale, so these automatically get recycled. Return bicycles are a liability issue, so these get donated.

Getting more specific, let's focus on returned food and drink. Fresh vegetables and fruit are sometimes not a great buy at Costco because of lower quality, so it's not uncommon for shoppers to return these items for a refund. Of course, anything partially eaten or moldy will be tossed.

According to the r/Costco thread, once food items leave the store premises and are brought back to be returned, they cannot be resold. This includes frozen food, premade meals, baked goods, and meat — apparently, some canned foods returned in perfect condition may be resold. If you simply don't like the flavor or brand of food you've purchased and tried, it's better to try to find someone to give it to rather than return it since it will likely be tossed in the trash. Be aware of these below-average baked goods at the retailer before buying to avoid food waste. However, Costco will donate any returned food that is unopened and non-perishable food items to an organization that distributes the food to unhoused people and shelters. 

Alcohol is one of those no-return exceptions. Even if you don't like the particular wine or spirit, it cannot be returned. However, if there is an obvious problem with the quality, it's safe to assume this would be allowed to be returned for a refund.

Costco operates massive return warehouses, where items from multiple stores and regions are inspected and sorted. The busiest time for the warehouses is of course right after the holidays. Here, the used items that cannot be resold as new at Costco, are examined to determine whether a product can be sent back to the vendor. If there is a small amount of damage, a cosmetic mark, a missing label, or a broken box, Costco will likely send it back to the vendor to receive credit.

Items that cannot be sent back to vendors are often sent to third-party sellers or liquidation warehouses. These buyers have contracts with Costco, where they must buy pallets of returned goods on a weekly basis; the pallets can include anything, like non-perishable food, clothing, and home goods. Then, these returned items are sold by third parties at secondhand stores, online, and discount retailers.