What Happens To Returned Costco Items, Anyway?

There is a psychological aspect behind Costco's "Risk-Free 100% Satisfaction Guarantee" that allows customers to return nearly anything they wish. While you can't send back things like alcohol (who's sending Costco's iconic tequila back, anyway?) or precious metals (apparently the warehouse sells literal gold bars), most other items can be returned to the store with no questions asked. Even its memberships can be refunded, a crucial feature that allows savvy shoppers to get a year of free shopping at Costco if they so choose this admittedly sneaky tactic.

People regularly return all kinds of goods, but once they're back in the store, those products need a home. Costco employees sort through returned merchandise before they're shipped off to one of the 12 return depots across the country. Regarding food items, the wholesaler doesn't take chances on reselling anything it isn't confident would be suitable for consumption, so perishable goods generally get thrown out.

However, the big-box warehouse sells much more than groceries. The regional return centers have employees separate and classify each item using a specific grading system. That allows the company to then choose a destination for those items based on their condition.

When refunded Costco commodities arrive at the return depots, they are graded from A to D depending on their overall condition. Grade A products are unused, unopened goods with no visible defects while grade B items have been opened but are still in decent condition. These are both considered products that can be resold in stores.

Grade C and D merchandise have a different destination: liquidation centers. Grade C items are slightly used but still functional, whereas products graded D are blemished, busted, or missing essential parts, rendering them unsellable in stores. These products could be electronics, apparel, or even food and are auctioned off in bulk. People often then sell them on a secondary market like eBay.

For folks who purchase from liquidation centers, Costco merchandise is often regarded as the cream of the crop. With one of the most generous return policies of any retailer operating today, there are frequently loads of quality goods that can be offloaded for a profit. However, while shoppers enjoy the company's "Risk-Free 100% Satisfaction Guarantee," resellers are given no such assurance. Selling returned Costco merchandise at second-hand markets is a roll of the dice which can just as easily turn out to be a fruitless venture as it can a profitable investment.