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ECommerceTimes.com

When Retail Customers Take It on the Chin, Investors Win

By Jeff Kagan
Jun 6, 2019 10:42 AM PT
costco investors benefit from its unfriendly customer practices

I am a reluctant Costco shopper. My wife is one of the many customers who really love the chain. Me... not so much. Seriously -- someone should knock Costco's top officials on the head and wake them up to the need to focus on their customers. After all, it's the customers who make Costco successful.

When my family owned lots of retail stores, I learned many important lessons that Costco needs to learn. Following are a few examples of Costco's failings.

Any Credit Card, as Long as It's Visa

Last week, I had to wait through a long Costco checkout line just to be reminded that it takes only one credit card, Visa, which of course I wasn't carrying at the time. I had other cards in my wallet -- American Express, MasterCard -- but not a Visa. Nor did I have several hundred dollars cash in my pocket. I stormed back to the parking lot to fetch a Visa from my car.

When I returned with the correct card in hand, I had to wait through the long line all over again. I know, I should have remembered the one card the store takes, but I forgot. This is not a problem I've confronted at any other retailer in the world. Other retailers apparently care more about keeping their customers happy.

The reason I didn't have cash in my pocket was that I'd been forced to spend my stash at Costco a couple of days earlier, due to its annoying one-card-only policy.

No Apple Pay, Google Pay, Samsung Pay

What is the purpose of Costco taking only one credit card? Prior to Visa, it only accepted American Express. Every other retailer takes every major credit card.

Sam's Club, BJ's, and many other stores let customers use smartphone apps for mobile payments, but Costco doesn't offer that customer convenience either.

Self-pay express lanes, which every other retailer seems to have, are nowhere to be found at Costco. Even in Costco's brand-new stores, customers have to wait in long checkout lines. That's just another in a long list of Costco's customer-unfriendly policies.

It would at least be nice if Costco would make bags available, so purchases wouldn't go flying around your trunk or back seat. If it wants to save that money, it still could offer bags for purchase. But wait… I forgot. Costco doesn't really care what customers want.

Add to this the fact that its employees card you on the way in and frisk you on the way out, and you can see why I detest this chain's customer-unfriendly practices. Costco treats customers with no respect.

Customer Experience Counts

I was born into a family of retailers. I learned how to take great care of the customer from my father and mother, my grandparents, and my aunts and uncles.

I learned that the customer is always right, even when the customer is wrong. After all, as my father used to say, you can win an argument and lose a customer. That is how I judge every retailer's operations. I expect respect when I shop -- and gratitude for choosing to shop there.

However, this doesn't seem to be Costco's take on things. Costco makes it harder than all get-out to shop there. It's not that the prices on most items are that much lower than other stores. You have to be educated before you buy there. If it's not a bargain, who would want to put a barrel-sized box of whatever in their pantry? Still, shoppers keep going, and Costco keeps growing.

You would think customers would hate it, but that's not the case. There are obviously loads of happy Costco shoppers. Who knows why? They obviously think they're getting good deals, so they are willing to put up with customer service abuses.

Justifying Customer Unfriendliness

Shareholders must love this. They are the ones who benefit from Costco's customer-unfriendly attitude. Costco seems to focus only on the shareholder. It seems to care much less about the customer. It doesn't do anything to make the experiences of its customers better or make it easier for them to shop there. As long as customers keep spending, Costco will keep acting badly and delighting its shareholders.

I do like some things about Costco, but the bad far outweighs the good. Costco surpasses every other retailer I have ever visited, in my entire life, when it comes to degree of difficulty in shopping there. Yet it keeps growing. Go figure. Sorry, got to go. My wife wants to go shopping again. Yup, to Costco!

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.


Jeff Kagan has been an ECT News Network columnist since 2010. His focus is on the wireless and telecom industries. He is an independent analyst, consultant and speaker. Email Jeff.


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