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November 10, 2008

Costco Encourages Rebate Honesty

Filed under: Business,Electronics,Retail — Edgar (aka MrConsumer) @ 7:16 am

Costco Wholesale has long been known for its ultra liberal return policy — return anything at anytime. It did, however, tighten the policy for certain electronics a year ago limiting returns to 90 days. With such a long policy in place, it occurred to someone at the company to ask the question of what happens if a consumer receives a rebate on an item and then the item is returned.

As a result, tucked away on its website, they address the issue:


How to reimburse the manufacturer for the rebate?  Yep. When have you ever seen instructions for doing that before? 

If you “click here“, they tell you how to do it:


If you received a Mail-in Rebate check and since have returned the item and would like to reimburse the vendor,  you may either:

  • Forward your rebate check (DO NOT void rebate check) to Costco Wholesale
  • Forward a check made payable to Costco Wholesale for the rebate amount

Of course, Costco is absolutely right suggesting that such a rebate is unearned and should be returned to the party who paid it. How many consumers, though honest in most respects, would actually do this is the real question?

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  1. They should do what Menard’s does. If you purchase an item with a rebate it comes with a rebate receipt so if you return the item you must also have the rebate receipt or the amount of the rebate is deducted from your refund.

    Comment by mitaliano — November 10, 2008 @ 7:59 am
  2. Mitaliano, what a great idea. Hope the execs at Costco read your comment.

    Comment by Richard B. — November 10, 2008 @ 10:21 am
  3. I don’t agree 100% about Costco’s liberal return policy. Last year, I purchased a pair of pants. When I finally decided to wear them, they no longer fit. I returned to Costco with my receipt and the pants with all tags still attached. I was told that my membership had expired and in order to return the item, I would have to renew the membership. I didn’t want to renew my membership because BJs had opened a store closer to my house. I don’t see why you need to have a valid membership in order to return a product with the original receipt.

    Comment by Renee — November 10, 2008 @ 12:08 pm
  4. Hmmm. It shouldn’t be hard to prevent this. For a rebate, you usually have to provide a proof of purchase (usually the original bar code of the product). Costco can just refuse to take stuff back without the bar code. Or whatever you needed to provide. On the other hand, it’s not really their problem.

    Comment by Jasper — November 10, 2008 @ 1:59 pm
  5. Very simple. Instead, send them a postcard telling them why
    their request for a rebate refund has been denied, or tell them
    to wait 8-12 weeks, and never send it.

    Comment by Dave — November 11, 2008 @ 10:04 am
  6. Since you are a member, they have your member information on file. When you return something, do they collect your member information? If so, they probably also know if you got (or at least could have gotten) a rebate, and therefore would (could) have to reimburse the manufacturer for that rebate.

    But, as indicated, I have to wonder how many people would fail to return the rebate money even if they didn’t intent to defraud anyone. Besides, what happens if it was a mail-in rebate and you never got the money? (Or does Costco only do in-store rebates? That would be nice if everyone did that!)

    Comment by RS — November 12, 2008 @ 8:52 am
  7. BTW
    I’m not a real big advocate of Costco. When you include their ever-rising membership fee, and the lack of savings on so many items, I wonder how many people actually save money compared to going to a local grocer that may have slightly lower quality for 2/3 the price (as I’ve found over and over) or much better deals if you include sale items.

    When I look at all the things that my friends buy there, they may save $1-$5 per month, which may or may not cover the cost of membership and then they’re stuck with those horrible lines and pushy people. (I’ve heard that some are not like that, but the two nearby me ARE!)

    So is their return policy worth it? As mentioned earlier with the expired membership, maybe not. However, I’m glad the rebate issue seems to be straightforward.

    Comment by RS — November 12, 2008 @ 8:56 am
  8. Jasper wrote:

    “For a rebate, you usually have to provide a proof of purchase (usually the original bar code of the product). Costco can just refuse to take stuff back without the bar code. Or whatever you needed to provide. On the other hand, it’s not really their problem.”

    Frequently, Costco’s rebates are electronic and sending in paperwork is unnecessary. That is why Mitalino’s suggestion works so well.

    Comment by Richard B. — November 13, 2008 @ 12:29 pm
  9. Costco takes full returns on virtually everything non-electronic. This includes the current year membership fee. You may terminate you membership for any reason and get a refund.


    So to Renee who wants to return pants but can’t: go ahead and open an account, return the pants, and terminate the account.

    Comment by af — November 16, 2008 @ 7:03 am
  10. I have returned an item which had a rebate and also the rebate. Costco has been very good at taking back electronics that don’t work very well. I bought an HP all-in-one printer L7555 and the HP techs couldn’t get it to work with my HP computer. So after a long struggle, back it went. I no longer had the box, but they took it anyway. That’s remarkable. So I don’t mind giving them back the rebates.

    I get better service at my local Costco than at a full-service electronic store. By comparing prices, I hope I won’t buy something that I could get more cheaply elsewhere, but if it is more but close, I’d rather get it at Costco.

    Comment by Larry — November 17, 2008 @ 10:30 pm
  11. Sounds like the Honor System. Costco has the honor and the customer has the System.

    Comment by ExitRamp — November 21, 2008 @ 9:36 am
  12. What I am wondering is….how do we know that Costco will forward those rebates to the manufacturers? They have you sign the check over to them instead of sending it to the manufacturer.

    Dave’s comment on November 11th was hilarious.

    Comment by Sherry — November 26, 2008 @ 10:02 pm
  13. Also, check the expiration date on the rebate check. It is now 90 days from issuing date, which may not be when it is received. We missed the date on ours since we were traveling when it arrived.

    Comment by Pat Stone — December 9, 2008 @ 11:07 am
  14. Ok…how about this? What if the rebate was provided by the MANUFACTUER? Does this mean that Cosco get the money for said rebate instead of being returned to Manufactuer?

    Comment by Carla — December 9, 2008 @ 12:55 pm
  15. Ugh…I missed a similar comment by Sherry…sorry for the repeat, folks.

    Comment by Carla — December 9, 2008 @ 1:01 pm
  16. Why not just have a built-in instant rebate at the register?

    Comment by Joe Mama — December 16, 2008 @ 3:42 am
  17. I like Costco, I am consistently surprised that at a so-called Warehouse with no service, actually find employes that know FAR more about electronics/computers than at so called specialty retailers like Best Buy (HATE Best Buy, high prices, rip-off extended warranty and restocking fees on some returns.)
    Even if same price or close to it, I would buy at Costco, they respect the consumer.. (And yes… the one time I returned a DVD burner that was acting up 4months later, I DID return the rebate… it is called KARMA!!!!!!!)

    Comment by Tom — March 31, 2009 @ 9:31 am
  18. Last year I purchased an air conditioner at Costco, sent in the $20 mfgr’s rebate form, and within a week or two of my purchase, decided to return the unopened, unused A/C to Costco because I just didn’t need it after all. When the $20 rebate check arrived in the mail a few weeks later, I sent it back to Costco. To me, keeping $20 for something you are fully refunded for is no better than stealing. It is simply unethical and wrong and anyone who says otherwise is deluding themselves. That $20 comes from somewhere, and ultimately everyone’s prices will rise to reflect the loss of $20 multiplied by the number of unethical people who decide to pocket it. The end of the story is that a few weeks after returning the check, I actually received a thank you letter from Costco saying thanks for returning the check, and praising me for being so honest and doing something that most people would not do in this day and age. This token affirmation that I am an honest and ethical person was worth far more than the lousy $20 would have been. Sadly, I am sure I am in the tiny minority on this issue.

    Comment by Charlie — July 21, 2009 @ 1:20 am

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