- Report: #4914
Complaint Review: Costco - Nationwide
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Costco
Nationwide, U.S.A.
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Costco Goes to Court, Accused of Duping Consumers REBATE RIP-OFF
THIRTY-FOOT-HIGH columns of Kodak film. Seven stacks of acoustic guitars sandwiched between automobile tires and computer software. Four-foot-wide aisles. The Costco corporation makes shopping a science by offering consumers an experience where they can pleasantly buy bulk goods at a significant bargain. But according to prosecutor Kim Stephens of local law firm Tousley Brain, the Costco experience also involves ripping off consumers.
Costco, whose profits reached $379 million last year, has grown from an initial location in Issaquah to a worldwide company with warehouses in Japan, Mexico, and England. The wholesale company is a consumer mecca. Costco's business model is simple: Buy a ton of goods from the manufacturer, and then sell it fast and cheap to the consumer. However, Costco's tactics are at the heart of the class-action lawsuit that is being heard this Friday at King County Superior Court. Lawyers allege that Costco, in a rush to move products out the door, systematically duped consumers.
The seven-page suit makes two points. First, Costco knowingly and systematically sold products with expired rebates. Second, the company advertised those products aggressively. The suit states, "[Costco] has intentionally, recklessly, and/or negligently engaged in a consistent pattern of selling products whose rebates have expired, failing to disclose the expiration dates to its customers, or removing the rebate information from the products' display cartons or packaging." The document further states that the "display and marketing of those products is materially misleading." Did Costco's business model--buying huge amounts of products--simply lead to the expired rebate oversight? Or did Costco receive significant discounts from manufacturers, thereby increasing profits at the expense of the consumer?
Woodinville resident Maradee Abel, one of the plaintiffs in the case, alleges that she repeatedly bought products with expired rebates. For example, Abel claims she bought some Ortega nacho cheese sauce and discovered later that the $2 rebate was expired. She immediately went back to the Kirkland Costco where she bought the cheese sauce, and complained. The Kirkland employees assured her that Ortega would honor the rebate if she mailed it in. She did, and heard nothing back from Ortega. Stephens says there are countless others who've had similar problems with Costco.
Selling and advertising products with expired rebates may not seem like a big deal when you're talking about nacho cheese sauce, but do the math: Costco has about 30 million shoppers. (Incidentally, to shop at Costco you must pay a $40 annual membership fee.) If just half of those members bought a $1 product under the assumption that they would get a rebate, that means Costco made $15 million under false pretenses.
That's a Rip-off!
Costco, whose profits reached $379 million last year, has grown from an initial location in Issaquah to a worldwide company with warehouses in Japan, Mexico, and England. The wholesale company is a consumer mecca. Costco's business model is simple: Buy a ton of goods from the manufacturer, and then sell it fast and cheap to the consumer. However, Costco's tactics are at the heart of the class-action lawsuit that is being heard this Friday at King County Superior Court. Lawyers allege that Costco, in a rush to move products out the door, systematically duped consumers.
The seven-page suit makes two points. First, Costco knowingly and systematically sold products with expired rebates. Second, the company advertised those products aggressively. The suit states, "[Costco] has intentionally, recklessly, and/or negligently engaged in a consistent pattern of selling products whose rebates have expired, failing to disclose the expiration dates to its customers, or removing the rebate information from the products' display cartons or packaging." The document further states that the "display and marketing of those products is materially misleading." Did Costco's business model--buying huge amounts of products--simply lead to the expired rebate oversight? Or did Costco receive significant discounts from manufacturers, thereby increasing profits at the expense of the consumer?
Woodinville resident Maradee Abel, one of the plaintiffs in the case, alleges that she repeatedly bought products with expired rebates. For example, Abel claims she bought some Ortega nacho cheese sauce and discovered later that the $2 rebate was expired. She immediately went back to the Kirkland Costco where she bought the cheese sauce, and complained. The Kirkland employees assured her that Ortega would honor the rebate if she mailed it in. She did, and heard nothing back from Ortega. Stephens says there are countless others who've had similar problems with Costco.
Selling and advertising products with expired rebates may not seem like a big deal when you're talking about nacho cheese sauce, but do the math: Costco has about 30 million shoppers. (Incidentally, to shop at Costco you must pay a $40 annual membership fee.) If just half of those members bought a $1 product under the assumption that they would get a rebate, that means Costco made $15 million under false pretenses.
That's a Rip-off!
1 Updates & Rebuttals
stacy
brooklyn,New York,
system improvement
#2UPDATE Employee
Mon, February 18, 2002
in response to your report all i can tell you as a employee is that sometime last year the company as developed this new system that will automatically print your rebate slip at the bottom of your receipt you dont need to go to the rack and get the different forms for each item that has a rebate all you need to do is fill out the form and mail it in. Now if you did see something with a rebate on it you will need to look in the bottom left hand corner of the sign and IT SHOULD have the amount of the rebate and the expiration date.Sometimes it is hard for the employees to go around and take the signs down after the rebate expires. And yes the kodak film is stack kinda high (I wouldnt say 30 feet) thats because it a good seller and a impulse item Where else can you find 2 packs of kodak one time use cameras for 9.99???
