Here's What Actually Happens To Returned Items At Costco

One of the many selling points of Costco you've probably heard about is the company's generous return policy. Barring a few exceptions, Costco will accept any purchased item as a return and refund you the cost of the purchase. That makes Costco a prime spot for purchasing any number of products. After all, it's a little easier to invest in a new gizmo or gadget if you know there's a 90-day return policy with no questions asked. It's a great way to make sure you have options as a consumer and aren't stuck with an item you don't want or that doesn't meet expectations. 

But that raises a very important question: where does all that returned merchandise go? Open-box items such as electronics don't usually just go back on shelves, and perishable or open-box food items can't be resold. But Costco also doesn't take a loss on those items. Instead, Costco maintains agreements with the vendors who provided these items to the store to unload returned items via open-box retailers and donations.

First off, if you return a food item, there's a good chance it's just going to be thrown out. FDA regulations stipulate that returned, open-packaged food cannot be resold for human consumption. However, if the box wasn't open, there's a chance it will get donated. Organizations like World Vision partner with Costco, receiving returned items or items that suppliers would otherwise order returned or destroyed to be donated to charity. Since 2014, World Vision reports it's received 480,000 pallets of donated food items for charity.

In the case of non-food items, those typically will go to wholesalers or liquidation stores. Companies such as liquidation auction firm BStock have built its business model around taking returns, unsold merchandise, and damaged goods from companies like Costco, Target, Amazon, and more. The items are then resold to consumers at a steep discount, typically in the form of pallets. Regardless of what happens, you can rest easy that your returns are likely not going to waste. It's just one more reason why so many users think Costco is worth shopping at.