Cato University 2

Go ahead, steal from Costco. They won't prosecute you, you'll just burn in hell for all eternity. Unless, of course, you live at least six months and remember to feel really sorry for ripping them off, after you've returned the laptop and it's too late to actually do anything about it.

That is how the game works, right?

X: I don't follow. Returning an item based on their return policy is theft? Isn't that what the policy is for?

If you bought the laptop with the intent to keep it and later changed your mind, no. If you bought it with the intent to "rent" a free laptop for six months, yes.

I heard Rush Limbaugh the other day explaining how anti-union Wal-Mart (mainly red states) donates primarily to Republicans, while pro-union Costco (mainly blue states) donates primarily to democrats. Make of that what you will...

As for the return policy, taking advantage of thier own ignorance is no crime, no more so than when rich republicans take advantage of legal loopholes (again, there is no such thing as an ILLEGAL loophole) in the tax code.

If it helps ease your mind, your hyper-literal interpretation of an insane return policy -- if it helps bankrupt a pro-socialist organization -- might not be so immoral after all....

X: I don't see what intent has to do with it. That's transparent to Costco and the legal system. Plus, knowing the rules and then choosing actions that are advantageous to yourself and also within the rules is what every moral person does.

Look. Costco's not out anything. They have such purchasing power that they demand universal return policies from their vendors. They are not on the hook the manufactuers are and it's an extremely small price to pay to get massive distribution of product. If it was not it would not go on. Personally I have spent thousands and thousands of dollars on personal electronics at Costco and returned very little. However, it is nice to know that every so often if I don't like a product I can return it. I bought a plasma HDTV from them that ended up not having component inputs. What a lame way to sell a HDTV Plasma. It was Sony no less.

A year latter when I finally got around to hooking the thing up to an HDTV receiver only to find out I was going to need to buy an additional converter box (never disclosed) in order to get the component video signal to an RGB input I was able to say screw this and take it back to Costco. Yeah Sony probably lost out but that's what they get for making an HDTV without component input (what morons).

I feel totally comfortable buying from Costco and probably spend much more there as a result of their policy.

I also am totally comfortable buying from them at any time. I hate it when you buy something and then 2 days latter the price drops. Oftentimes I won't buy at all and end up not getting the product because I hate it when this happens. With Costco if this happens I know I can go back to them for the difference.

If Costco did not end up ahead with their return policy they would not do it. They have the muscle to force the manufacturer into unlimited returns at no expense to them and get more business from consumers because of it. Pretty smart actually.

To say that it is unethical to use an accepted business practice that in part is unprofitable to a company but is in it's entirety very profitable to a business is poor reasoning. Under this logic it would be wrong to take a teaser rate for a credit card and then after 6 months switch to another teaser rate - or to take the newspaper for free for 6 weeks and then cancel. These business models have a built in factors for these scenarios and they are still quite profitable. Safeway will give my kid a free cookie and a free balloon. Is it ethically wrong to walk into a Safeway and get a free balloon and cookie for my kid as it's "stealing" from Safeway? I don't think so -- nor is returning an item at Costco.

I recently posted a link on my blog http://thomashawk.com about Best Buy taking an adversarial position with it's "problem" customers. (For instance those that only buy on sale). Let me tell you Best Buy gets 0% of my personal electronics business and Costco gets a substantial share.

Stealing from Costco. Yeah right. Costco made almost $1 billion in profit last year.

Thomas Hawk
http://thomashawk.com

Marty: Must we play red-state, blue state? Please. One might just as well argue that Republicans should think 9-11 was no big deal, seeing as it only targeted blue states. Sorry, not buying it. Stealing is stealing, it doesn't matter who you steal from.

Michael: intent is relevant to every voluntary transaction, which implies a duty of good faith. If Costco scammed YOU in exactly the same manner, they would be shut down in a heartbeat, and the marketing folk who cooked up the scheme might well end up in prison.

Thomas: see my comment to Marty. Stealing is stealing; the victim's identity, wealth and earnings are irrelevant. The possibility that the ultimate victim of the scam may be Compaq rather than Costco does not affect the morality of the scam, either.

All: stunts like this are also stealing from me, as I like to shop at Costco, and also like their generous return policy. I have only actually used it once, but on more than a few occasions I've "used" it in the sense that I was comfortable buying a product I was less than 100% certain I would want to keep. That's what the policy is for, to encourage people to make purchases in good faith. If too many people abuse the policy, Costco will have little choice but to get rid of it for everybody.

Thomas: just to clarify, by "scamming" I'm referring to the practice of purchasing merchandise with no intention of keeping it. I am not referring the practice of using Costco's generous return policy for the purposes for which it was created.

X: I think this is part of the purpose for which it was created.

I guess it depends on what you mean by "this." If "this" means you weren't sure you wanted a lapto but bought one to try it out and see, then I agree. If it was because you really had no need for a laptop except during a brief stint at Cato U., and bought it with the intent to rent a free laptop, I disagree. Your original post wasn't entirely clear, but seemed to hint toward the free rental interpretation. Your subsequent comment that intent was "irrelevant" seemed to go even further in that direction, but maybe I read too much into it.

xrlq sounds like she's going to miscarry.

X: I suppose it was more "try out", but probably not keep. I've never wanted or needed a laptop before, and it's hard to imagine using it again.

I still don't see how it's inappropriate to use their return policy for my own advantage. It's "no questions asked" for a reason, they want you to buy it with the hope you'll keep it, even if you don't initially intend to.

What costco gets is my money...even if only for a short time.

Say I buy a tv for $1000...and i return the tv in 2 yrs cause HD4 chips are out. Costco still had my grand to use for 2 years. Properly invested they may have made 20-40 percent or used the money to open a new costco to make even more money.

The same goes with the tv company...they had costcos money to use or invest. Maybe they improved their production line with some of the money and are now making tv's cheaper and getting a bigger profit on sales.

As for when the tv comes back to them...they sell it as refurbished and still make more money.

Michael here clearly displays his ignorance about retail and how much "buying power" a major retailer has. Who is bigger...Sony or Costco? Who is bigger...Costco, Wal-Mart, Best Buy, Circuit City or Target? All are larger than Costco, and all eat the profit margin when something is returned and has to be sold at a loss. Unfortunately, what Michael fails to realize here is that when Costco (in this instance) purchases X number of units from Sony, that deal is finalized and bills are paid before they are even put on a barge in Asia to head over to the US. Any returns (unless they are warranty service returns back to the manufacturer) are blind to the manufacturer.

Poor Michael thinks that his beloved Costco makes money no matter what. What he doesn't see is that his silliness up front is ultimately costing Costco money. Think about it Michael, if they still ended up making money, why would all other retailers follow their lead? Why isn't Costco sitting atop any list for any kind of sales (Consumer Electronics, clothing, automotive...name your department). You are just choosing to hide behind ignorance to make yourself feel better about what you know is wrong. But, I openly encourage you to continue doing so. Costco is on their way to Chapter 11 soon anyways, so help them get closer to the inevitable.

Todd: No need to be so condescending, it doesn't make your argument more persuasive or your personality more likable. Maybe it boosts your ego to act like a big shot, but it just makes you look foolish to everyone else, which is probably the opposite of what you desire.

Anyway, I couldn't care less how much money Costco makes. I don't own stock, and their business concerns are immaterial. They make an offer with known conditions, and I accept or reject it. It's call a free market. Accepting or rejecting offers in a free market is morally neutral, because both parties are free to set their own conditions.

Michael,
As a consumer and patron of any establishment, you should care how much money they make. If they end up not making money, what do you think will happen in time? They go under, and ultimately you are looking for a new retailer with which to spend your money. Look at just about any other retailer of significance, and you will not find Costco's return policy.

Think of it this way. Say you have a beautiful forest which you love. It's very scenic, and there's no other one like it. Let's say there are no laws stating you can't litter, cut down all the trees, or make a race track in the middle of the forest. Does that mean you should just because they don't have a law against it? If you really cared for the forest, then you would use it, enjoy it, and do everything within your power to preserve it so that it's there the next time you want to use it.

Same applies here. Costco has given you an opportunity to return (not rent) a product for up to 6 months. By taking advantage of that, you unknowingly are taking away future Costco visits from yourself. You are your own worst enemy as a Costco shopper.

If you read any business magazines, news articles, or anything of the like, you'll note that nearly all retailers have gone to a much stricter return/exchange policy exactly because of people like you. Exactly. Doubt me? Read up.

Lastly, I apologize if you took my email as being offensive. I hope you didn't get wrapped up in the tone of the email to lose the message in the body of the message. Costco loses huge when you (and others like you) return stuff like this, ESPECIALLY computers and TV's, as they depreciate quicker than a new car. So if you don't care if Costco is around in another couple years, then I'd say proceed. Morally, I'd debate it, but I'm not here to debate morals. I'm clearing up your misconceptions about how business is done, and moreso, disproving your nonverbal suggestion that there are no "victims" when this kind of activity takes place.

Just something to think about next time you are in line either purchasing something or returning something.

Just as a point of clarification, I'm not stating that you shouldn't use their policy. Like you said, if they offer it, it should be used. However, it should not be abused, that was my point, which I think I failed to accurately get across in my last posting. My apologies.

Todd: As a patron, my concern is only that they make as little profit from me as possible, thereby ensuring that I reap as much benefit from the relationship as possible. If I can get them to lose money to me without forcing them to stop dealing with me, then it makes economic sense for me to do it, and there's nothing immoral about it. It's price discrimination from the consumer side, just like how movie theaters charge seniors, kids, and adults different prices for the same ticket.

Costco isn't at all like a commonly held forest, because it isn't common property, it belongs to someone. If they enact policies that allow me to profit off them, that's their business. If other retailers have enacted stricter policies, then they're smart to do so. It's up to them. I have no moral obligation to abide by any policy other than the one in place.

If you leave morality out, your use/abuse distinction is meaningless.

Costco charges between 10-50% above the cheapest offer on most electronics. I.E. I bought a projector for $1400 there, found it for $750 online. I don't feel bad abour returning the projector when the bulb burns out or when they get a new better model since i've overpayed by $700. They get to use my money for a year and I get to use their equipment for a year. If costco changes their return policy, I will turn in my membership card and say good buy since 1. I can buy the item cheaper from somewhere else. 2. I can purchase an additonal extended warranty from a retailer for 5 years cheaper price than costco's difference in price item. 3. I'm not charged a membership fee anywhere else to buy from them 4. My Mastercard will double the extended warranty up to five years on anything I purchase and I get mileage. Costco doesn't except MC or Visa.