Costco is refusing returns on hoarded items
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.
- Some Costco stores are banning returns on items like toilet paper, soap, and rice as people panic-buy amid coronavirus fears – Business Insider
- Costco Signs Indicate The Store Is Refusing Returns On High-Demand Items Like Rice And Toilet Paper – Delish
- Grocery Stores Are Changing Their Hours And Policies Amid The Coronavirus Outbreak – Delish
- Panic buying leaves retailers scrambling to restock – ABC News
- Costco Wholesale Corp (COST) Q2 2020 Earnings Call Transcript – The Motley Fool
- Trump says ‘relax,’ urges against hoarding as coronavirus cases soar and Fed cuts rates to zero – CNBC
- Retailer Leaders Urge Responsible Shopping During Pandemic – Retail Industry Leaders Association (RILA)
- Costco Insider – Instagram
- Costco Buy – Instagram
- Costco Deals – Instagram
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?
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38 Comments on "Costco is refusing returns on hoarded items"
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Founder, CEO & Author, HeadCount Corporation
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.
Vice President, Research at IDC
This brings up the question of returns in general. COVID-19 has a long shelf life on plastic, metal, glass and other materials. Not sure many retailers have thought through any new disposal, disinfecting, and restocking policies yet. Should all returned products be rejected?
Chief Executive Officer, Progress Retail
It’s rare I don’t side with the customer, but there’s nothing normal about what is going on at the moment. Costco or any retailer shouldn’t have to pay for these consumers behaving foolishly.
Principal, Retail Technology Group
I echo that sentiment. Besides, since these items were deemed to be so important that they needed to be hoarded they are, almost by definition, consumables that the hoarders are going to continue to need. The hoarders just won’t have to shop for those items for longer than most of us. Unlike bananas, these items won’t spoil over time. Yes to Costco!
Good! I hope other retailers do the same thing. This hoarding had no rhyme or reason – people were hoarding water and toilet paper, but also pillows, blankets, plastic flowers, multiple gallons of milk (not just two or three, but eight or more), etc. I just don’t get it.
I was out in markets yesterday and it was a little more civil in regards to buying as a lot of retailers put a limit of one on a lot of those items.
President, b2b Solutions, LLC
I just saw an article about a market in Denmark that had a unique approach to prevent hording of hand sanitizer. If you bought one the price was $5.75 but the price jumped to $143 for anyone who bought more than one.
VP of Strategy, Aptos
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!
Marketing Strategy Lead - Retail, Travel & Distribution, Verizon
This is a reasonable and smart returns policy. Hopefully, consumers will think twice on some of their hoarding purchases. I also heard that Costco was not allowing returns on some other COVID-19 inspired purchase, such as bidet seat covers. We will probably see a lot of these on Craigslist after the virus fears subside.
President, b2b Solutions, LLC
The customer is always right, except when they aren’t. These people weren’t right. Those who bought items at the hoarding level were denying others their opportunity to buy something they may need now, not some time in the future. Costco’s decision will not likely impact this type of behavior in the future but as Mark stated it does potentially protect others from exposure to the virus.
Senior Vice President Marketing, PDI
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).
Co-Founder and CMO, Seeonic, Inc.
I absolutely agree with Costco’s no-return policies on hoarded items. It is a travesty to see people behave this way in times of a crisis. Rather than pass legislation directed at this problem, Costco’s approach will likely be followed by other retailers relieving the interest in hoarding. Retailers can limit the number of items per sale, throttling store purchases. Another solution is to increase supply. Producers who are able should increase production and take the pressure off the increased demand in stores.
Founding Partner, Merchandising Metrics
Yes! Let the hoarders sit with their two-year supply of whatever, or find a way to give it away or donate it somehow. While the retailer could probably resell the product quickly, that’s not the safe or appropriate answer right now. The supply chain will catch up, especially if hoarding is penalized AND if retailers implement some kind of “one-per customer” rule. I saw a video yesterday of a customer who had bought out a Dollar General store of ALL of their paper products. Their pickup truck was being stacked high with box after box as other customers looked on. WHY would any retailer ever let something like that happen? Hoarding and price gouging cannot be tolerated. The guy that hoarded over 100,000 hand sanitizer products in hopes of making a buck should have provided a sufficient lesson to all. He ended up having to give most of it away.
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
Bravo Costco! I can’t wait too see one of the hoarders try to bring something back. 🙂
Director, Growth Marketing for Wizard
Yes this makes total sense. Costco needs to focus on serving as many customers as possible, not just making a few who have more money to spend happy. Plus, their store associates need to focus on re-stocking and ringing, not returns. The sanitary considerations are a side bonus.
Chief Executive Officer, The TSi Company
I commend Costco for taking this position. More recently many retailers, particularly grocers, are limiting the number of items consumers can buy. We have a pandemic, but we also have mass hysteria from a few people that cause this craziness. The other day I was in a store and overheard a conversation with two people. One was talking about how pleased she is that her husband finished building the bunker over the summer, and all they’ve been doing is stocking up. This behavior is nuts! So it’s people like this that have got to be limited with what they can buy. In their minds, it’s all about “their” survival. We will ALL get through this. Yes we still have a hard road ahead of us, but we’re so much stronger together than independently. So if we have to limit quantities of an item and refuse returns on hoarded buying, that’s fine because it’s a matter of everyone getting through this and not just a foolish few.
Chief Amazement Officer, Shepard Presentations, LLC
Good move by Costco. There is some “extreme” behavior that is being exhibited by irrational consumers. Two things… First, I agree with the return policy. Second, retailers should have placed limits on these types of items to begin with. Both of these decisions come after-the-fact, now that we know what history has taught us. I side with the retailer on this issue.
Managing Director, GlobalData
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.
Managing Partner Cambridge Retail Advisors
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.
President, The Ian Percy Corporation
Absolutely! Without question. I just wish there was a “Like All” button for my colleagues comments today. A “thumbs-up” to all.
Director of Planning & Loyalty, Moosylvania
Twenty years ago both brands and retailers could play the price equilibrium game any time they wanted, but today the stakes are too high and thankfully the wrath of the internet will put in check any who are greedy enough to attempt.
President/CEO, The Retail Doctor
In hindsight, this seems obvious but all bets are off as far as any retailer knowing how to navigate this surreal landscape we find ourselves in. I applaud their actions.
Associate Principal, Cushing Terrell
Costco is not the only retailer establishing return policies on specific items as well as imposing limits on number of items purchased. It is a necessary and appropriate retailer response during this time. Retailers have shortened hours to provide more stocking time overnight to restore shelves with products. There is also what we hope to be a temporary demand issue as food production and suppliers work to catch up. The hoarding behavior for many is a basic physiological response being stimulated by fear and panic. Maslow’s Hierarchy of Needs places physiological needs as the foundation, food and shelter are those basic fundamental needs. Understandably the risk of exposure and tampering are of concern which further supports retailers’ positioning.
Professor of Food Marketing, Haub School of Business, Saint Joseph's University
For the many reasons noted, I fully agree with my BrainTrust colleagues. This is about safety and dignifying all of their customers. BTW, Publix has instituted a similar policy. Stay safe, all.
President, City Square Partners LLC
I absolutely agree! Many folks have already posted agreeing with this step and I hope other retailers will follow the no return policy. If customers are really overstocked at home, store it and use it over time. Maybe a better idea is for these customers to donate part of their stash to their local food bank or older neighbors in need.
Senior Vice President, Dechert-Hampe (retired)
Of course I agree. But the thing that actually struck me about this discussion is that it might be the highest participation (judged by number of comments) on a topic with 100 percent agreement among panelists ever.
Rick, is there a stat for that?
Retail Strategy - UST Global
Good — and that’s why they call it “leadership.” Every small sane step is a sane step forward.
Principal, Frank Riso Associates, LLC
I do agree with the newer policy for the rest of the year at least. Placing limits on these items should also help reduce the hoarding. Costco is a retailer that truly cares about its customers, and especially about older shoppers. Taking advantage of them is not right, so I agree with the policy. I recently saw signs at Costco stating what items were out of stock so that you wouldn’t have to go into the warehouse if those were the items you are looking for, in order to prevent more shoppers from being close together. Another sign that Costco cares deeply during the crisis!
Consultant, Strategist, Tech Innovator, UX Evangelist
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.
Principal, Your Retail Authority, LLC
I say, good for you Costco! I have a friend who was just placing her regular order on Amazon for staple goods and guess what? She cant get toilet paper until May. That is beyond crazy. Hopefully there won’t be a next time but should there be, Costco should definitely limit purchases on the front end too. For my 2 cents.
Founder, Grey Space Matters
While I agree with everyone here — the better strategy for Costco would have been to limit hoarding in the first place. This is among the loyalty lessons merchants and other businesses will have to learn from this crisis, and that is to take care of your most valuable customers first. That includes metering what they can and should buy so that high value customers aren’t suffering from hoarding and consequent stock-outs.
VP Sales, I-Drink Products
Thumbs up, Costco! Now, what if the retail industry could develop a policy to prevent future hoarding on staple goods during emergencies? I’m sure they can do so.
Principal, Cathy Hotka & Associates
Good for Costco! Customers shouldn’t be allowed to empty the store, cheating others out of accessing these products, then return them when the crisis subsides. We’re all in this together; let’s act like it.
President, Dellmart & Company
Costco is correct for not accepting returns in hoarded products, simply for health safety concerns. Further, the “you bought it you own it” rule works well. Right now, other paper manufacturers are coming on stream making toilet and towel paper products. The panic buying cannot last forever and I forecast a surplus supply within 2 weeks for these products.
The bigger food industry issue is the volume switch from eating away from home to at home consumption. The typical supermarket should expect a 20% to 40% volume increase as workers and students are not eating in cafeterias. Further, people are not going out for lunch or dinner. The away from home volume has been approaching the at home volume for years. Short term, some of this volume must be handled by retail and/or internet shopping.
As commentator number 33. I don’t think I really have anything to add, accept to applaud Costco for the action they are taking.
President, Wunderman Thompson Commerce Marketplace Services
The underlying challenge is to reduce hoarding so that available resources (consumables in this case) can be best distributed across the population. Costco’s policy here is one effective way to do that. I support it. However, retailers should also look for ways to re-instill confidence in fulfillment expectations.
Panic buying and hoarding occurs because consumers no longer believe they will get stuff when they need it. Retailers should be more clear on, or create new policies on, buyable quantities and delivery expectations. With Amazon Prime delivery dates currently extended, resetting consumers expectations to what is realistically achievable, and meeting them, will also reduce hoarding and “renormalize” distribution.
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
I’m late, but still want to add my voice to this choir. Hoarders are #badcitizens who should not be rewarded for their selfishness. Costco is acting rightly in this instance.
CEO, President- American Retail Consultants
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?
Retail and Customer Experience Expert
I don’t think you will find much disagreement on this one. If you hoard, you paid for it and you can’t return it. Once the product is hoarded you really can’t return it to the supply chain without worrying about open packages and other issues. I posted on social media that if someone hoarded TP or paper towels, they can donate it to shelters, masks and cleaning wipes to hospitals, and rice to food banks. Most stores now have a one package limit per person, which helps a bit. I drove past Costco today and still see people coming out with nothing but bottled water (which makes zero sense).