Costco/BB/CC/Sears/Dell et al Master Thread: NO PRICING /NO COUPONS - Page 122 - AVS Forum
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post #3631 of 3647 Old 03-01-2007, 08:43 AM
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Originally Posted by waverider01 View Post

OK, after reading this thread for the last few days, I have a few thoughts that I think I must share. So here is my 2 cents.


I have been a member for 12+ years. Every time I go, there is always allot of people in line not for consumer electronics, but for groceries, office supplies or small business owners buying items that they need store or shop. Not to mention the clothing section or people purchasing CDs and DVDs. I think I once saw someone buying a TV. TV purchases are a very small percentage of Costco's sales. So I think that they will stick around for a very long time.

I read yesterday the TV purchases were less than 5% of total sales. While Costco TV sales may decrease as a result of the policy, folks that buy TVs from costco in the future will be more likely to buy TVs and keep them.

Total sales may go down slightly but revenue will most likely increase.

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post #3632 of 3647 Old 03-01-2007, 09:28 AM
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You Stated That Costco Has The Best Prices. It Does Not.
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post #3633 of 3647 Old 03-01-2007, 09:40 AM
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Originally Posted by M4P View Post

If Costco allowed someone to return a tv after 7 years, then Costco has no one to blame but themselves. That's just crazy. They should have nipped this type of abuse in the bud a long time ago. Sure, post the link if you like. Just mind boggling that someone would return a tv after all that time. From the get go, Costco should have had a policy wherein you could return a tv after let's say 90 days, for defects only. They could make the person have to go through their conceriage service first to verify that the tv was in fact defective. Then once it was determined that it was, the person could get a refund. Seems like that would have stop the abusers, yes?

Well that is exactly what they are doing now. And like I have said countless times.... Abuse was not an issue when the liberal return policy first began. It did not become out of control until a few years ago. People became bolder and more determined to get their way. Some were/are denied. But some also start yelling and screaming and start calling 1-(800) numbers complaining until they get their way. The more rude they are the better their chances. The policy was intended for peace of mind, but for many it turned into a free upgrade service. Once again...if you have a problem with the change in policy..complain to those who think having a Costco membership gives them the right to upgrade their TV every 5 years.
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post #3634 of 3647 Old 03-01-2007, 09:42 AM
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Originally Posted by M4P View Post

You raise a very good point. I mentioned in another post that a person tried contacting Sharp about their Costco specific Sharp tv, and Sharp told them they had to go through Costco. Also, I know Pioneer is very strick about buying from an authorized dealer, and Costco is not listed on Pioneer's approved dealers list, as far as I know.

If that was the case now...it no longer is the case today. Under the new policy if the items Manufacture Warranty expires or is not covered if purchased from Costco...Costco will cover the warranty untl the 2-year mark. That means if the default warranty was 6 months...Costco will continue to cover it for another 18 months.
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post #3635 of 3647 Old 03-01-2007, 09:53 AM
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Originally Posted by opus312 View Post

Probably true, it's amazing how many folks in consumer forums are seemingly anti-consumer. Anyone here have verified figures on abusive returns? No, we just accept whatever the retailer or the National Retail Federation tells us (as does the media). And of course they have a vested interest in making the problem look as bad as possible...

Let me try to put things into perspective....

Any Costco employee who who has worked for the company as long as I have has had to deal with this stuff for so long it quite frankly just starts to get under your skin. I don't know how many times I have had to say it but...the VAST majority of returns were legit. In fact I posted that 67% of returns were made with in the first 90 days. That being said....there is still a pretty large amount of people abusing the policy. When you see it everyday as I do you can't help but be irritated. I would have rather seen the old return policy stay but I knew it wouldn't last forever. It is rather easy for you guys who happen to wander into Costco once maybetwice a week at the most to judge my opinion. You see a very small percentage of the TV's coming back, and you don't see ANY of the Ipods, Cell phones, Cameras, and Camcorders because those are locked up.

And no I do not "have a vested interest in making the problem look as bad as possible" Because to be honest...this policy is going to make my workday a living hell in a few months when those who once abused try to continue to do so, but are denied.

I find it interesting that for the most part those who have thousands of posts here in this forum, and those who have been Costco members for years and years seem to have no problem with the change.
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post #3636 of 3647 Old 03-01-2007, 09:58 AM
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Goober, first, employee pay and benefits has nothing to do with revising the returns policy. Both should be considered on their own merits by your own metric of "what benefits the shareholders." If revising the returns policy benefits shareholders, it should be done, regardless of what is done with employees. And if chopping employee benefits benefits the shareholders, it should be done regardless of what happens with the return policy. They are wholly unrelated to each other according to the only benchmark you recognize, $$ to owners.

Second, regarding the merits of your suggestion that costco should take the axe to employee benefits, as other folks have observed, costco has been killing sam's club with identical return policies. Thus, the reason for the difference in their performance must lie elsewhere. Sinegal, whom you deride as the mayor of Mayberry, has made the rational calculation that increasing pay and benefits, thus improving worker company loyalty, is a net gain to the company. Studies have borne out that costco has far better employee retention and far less shrinkage (employee theft) than other retailers. These facts help costco's bottom line considerably, and chopping employee benefits to a level just-above-walmart would very likely ruin company morale and could well turn these factors to a level worse than industry average (people get madder when you take away something than if you never gave it to them in the first place). Moreover, I can tell you with 100% confidence that there are costco members who are members and go out of their way to shop there because of costco's good treatment of their employees. I am one such member. (They also have great prices on really good blue cheese.) If costco became walmart-plus-$1 I'd say screw 'em both.

I'm sure you make a lot of money, well done. But unless you run a worldwide company with revenues on par with costco -- and I suspect you don't given that you're posting on AVSForum at 10 in the morning -- maybe you could acknowledge that maybe other folks have taken things into account that you haven't (sinegal, not me, I'm just a worker bee (not at costco)).
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post #3637 of 3647 Old 03-01-2007, 10:00 AM
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Originally Posted by ToolBox13 View Post

If that was the case now...it no longer is the case today. Under the new policy if the items Manufacture Warranty expires or is not covered if purchased from Costco...Costco will cover the warranty untl the 2-year mark. That means if the default warranty was 6 months...Costco will continue to cover it for another 18 months.

How will it be covered? Will Costco pay to have someone come into my home to repair the set? How quickly will they respond?

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post #3638 of 3647 Old 03-01-2007, 10:09 AM
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Originally Posted by M4P View Post

How will it be covered? Will Costco pay to have someone come into my home to repair the set? How quickly will they respond?

I am not sure on that yet as not very many people have had to use the service yet. I do know that in most cases tv's 32in+ are in home repair. I am not sure if Costco will have it's own techs eventually or if they will contract with another company. I will see if I can get som details on that this week. As far as how quickly they will respond... I guess that will have to be a wait and see game as well. Knowing Costco, it will be much faster than if you purchased it at BB/CC and called to have them fix it.
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post #3639 of 3647 Old 03-01-2007, 10:12 AM
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Originally Posted by OpusGoldStar View Post

Goober, first, employee pay and benefits has nothing to do with revising the returns policy. Both should be considered on their own merits by your own metric of "what benefits the shareholders." If revising the returns policy benefits shareholders, it should be done, regardless of what is done with employees. And if chopping employee benefits benefits the shareholders, it should be done regardless of what happens with the return policy. They are wholly unrelated to each other according to the only benchmark you recognize, $$ to owners.

Second, regarding the merits of your suggestion that costco should take the axe to employee benefits, as other folks have observed, costco has been killing sam's club with identical return policies. Thus, the reason for the difference in their performance must lie elsewhere. Sinegal, whom you deride as the mayor of Mayberry, has made the rational calculation that increasing pay and benefits, thus improving worker company loyalty, is a net gain to the company. Studies have borne out that costco has far better employee retention and far less shrinkage (employee theft) than other retailers. These facts help costco's bottom line considerably, and chopping employee benefits to a level just-above-walmart would very likely ruin company morale and could well turn these factors to a level worse than industry average (people get madder when you take away something than if you never gave it to them in the first place). Moreover, I can tell you with 100% confidence that there are costco members who are members and go out of their way to shop there because of costco's good treatment of their employees. I am one such member. (They also have great prices on really good blue cheese.) If costco became walmart-plus-$1 I'd say screw 'em both.

I'm sure you make a lot of money, well done. But unless you run a worldwide company with revenues on par with costco -- and I suspect you don't given that you're posting on AVSForum at 10 in the morning -- maybe you could acknowledge that maybe other folks have taken things into account that you haven't (sinegal, not me, I'm just a worker bee (not at costco)).


All I have to say is THANK YOU.
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post #3640 of 3647 Old 03-01-2007, 10:59 AM
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Originally Posted by OpusGoldStar View Post

Goober, first, employee pay and benefits has nothing to do with revising the returns policy. Both should be considered on their own merits by your own metric of "what benefits the shareholders." If revising the returns policy benefits shareholders, it should be done, regardless of what is done with employees. And if chopping employee benefits benefits the shareholders, it should be done regardless of what happens with the return policy. They are wholly unrelated to each other according to the only benchmark you recognize, $$ to owners.

Second, regarding the merits of your suggestion that costco should take the axe to employee benefits, as other folks have observed, costco has been killing sam's club with identical return policies. Thus, the reason for the difference in their performance must lie elsewhere. Sinegal, whom you deride as the mayor of Mayberry, has made the rational calculation that increasing pay and benefits, thus improving worker company loyalty, is a net gain to the company. Studies have borne out that costco has far better employee retention and far less shrinkage (employee theft) than other retailers. These facts help costco's bottom line considerably, and chopping employee benefits to a level just-above-walmart would very likely ruin company morale and could well turn these factors to a level worse than industry average (people get madder when you take away something than if you never gave it to them in the first place). Moreover, I can tell you with 100% confidence that there are costco members who are members and go out of their way to shop there because of costco's good treatment of their employees. I am one such member. (They also have great prices on really good blue cheese.) If costco became walmart-plus-$1 I'd say screw 'em both.

I'm sure you make a lot of money, well done. But unless you run a worldwide company with revenues on par with costco -- and I suspect you don't given that you're posting on AVSForum at 10 in the morning -- maybe you could acknowledge that maybe other folks have taken things into account that you haven't (sinegal, not me, I'm just a worker bee (not at costco)).

They are not unrelated. It's all bottom line driven. How hard is that to understand? Also, do you not read what is written? I'm saying to pay Costco more. But, it's probably not necessary to pay them 40% more (which is the number I think I read somewhere) since they don't have to pay as large a percentage of their salary for health benefits.

I'm lucky with my job. I come and go as I please and do what I please, basically whenever I please. Clearly I work for a smaller company (4B+ in revenues and 35K employees plus), but we are a manufacturing company in every corner of the world, which makes this business just as hard to run as a domestic retail chain. Plus, I don't run it. My role is advisory and I'm involved in global policy making.

I think Sinegal runs it great--better than probably anyone ever could since it's his baby and he works so hard at it. But, he's the old generation. Expansion is feeding the growth. When expansion slows, growth will as well. Tell me then, how do you continue to feed shareholder revenue growth appetites? People like Sinegal can never come to terms with slashing SG&A through employee pay and benefits. A younger generation CEO would make those decisions. It doesn't mean the slashings would make it marginally above Walmart, but it doesn't have to be 40% either. I just look at the SG&A as a percentage of gross income and think it's too high.
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post #3641 of 3647 Old 03-01-2007, 11:29 AM
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Originally Posted by M4P View Post

If Costco allowed someone to return a tv after 7 years, then Costco has no one to blame but themselves. That's just crazy. They should have nipped this type of abuse in the bud a long time ago. Sure, post the link if you like. Just mind boggling that someone would return a tv after all that time. From the get go, Costco should have had a policy wherein you could return a tv after let's say 90 days, for defects only. They could make the person have to go through their conceriage service first to verify that the tv was in fact defective. Then once it was determined that it was, the person could get a refund. Seems like that would have stop the abusers, yes?

What you fail to understand is Costco was forced into a new kind of policy only recently. The annual or 6 month upgraders are happening becasue of the new landscape around tvs. Before the flat tv explosion, there wasn't a reason to upgrade frequently. All tvs were basically the same and the price difference from a past model to a current one was neglible.
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post #3642 of 3647 Old 03-01-2007, 12:58 PM
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Originally Posted by ToolBox13 View Post

Thank you for representing the majority of Costco members view point! The above post comes from someone who has ethics and is responsible with how they spend their money. They also appreciate good service, and value, which is why they will continue to spend big bucks at Costco. Logical, sensible people, will agree with this.

GooberedUp.. on the other hand has no ethics and values above all the almighty dollar, which is why he suggests slashing Cosctos wages to that of just over Wal-Mart employees, and he still wants the old "free upgrade" refund policy, because he probably was the one upgrading his old digital camera to the newest one with the latest mega pixels. You don't get it that making the bottom line pencil in isn't what matters to most people. Supporting Costco is supporting a good ethical business that is good for America. People can't live off of Wal mart wages, and they can barely live off of Costco wages, especially in this day with crazy inflation and ridiculous home prices.

I understand you don't like the thought of getting your pay cut. I just don't see in the long run Costco being able to sustain their present business model. There's only a finite amount of expansiont that's possible. You guys really are fungible, which will lead to the eventual phasing out of relatively higher salaries and benefits. Regardless of what you think my ethics are, Costco is a business in business to maximize shareholder value. The quicker you understand that, the quicker you'll be able to accept whatever fate is down the road for you in your "career".

I don't do the return game. Never have and don't need to. As I said before (since it seems that you Costco employees are probably paid higher, but must understand less), it's about the peace of mind, not the upgrading.
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post #3643 of 3647 Old 03-01-2007, 01:03 PM
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Stop with the name calling. It's a sure way for the moderators to close down the thread.
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post #3644 of 3647 Old 03-01-2007, 01:30 PM
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If TV and electronics are only 5% of Costco sales how the hell are they losing so much money on return abuse? Even if 25% of sets are returned within 5 years that is still only .0125% of their sales over that period! Do the math! Sounds to me like Costco is already in trouble financially if a .0125% drop in revenue is such a problem. My advice to Costco is stop paying high wages and benefits to employees and give the customer a break on prices! Heck, fire a few of them once in a while and you could actually lower prices - that will increase sales and profits in one fell swoop! You may also want to check on how many are spamming this forum on company time! Or are you paying them bonuses just to do so?

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post #3645 of 3647 Old 03-01-2007, 01:31 PM - Thread Starter
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post #3646 of 3647 Old 03-01-2007, 02:23 PM
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Originally Posted by dsmith901 View Post

If TV and electronics are only 5% of Costco sales how the hell are they losing so much money on return abuse? Even if 25% of sets are returned within 5 years that is still only .0125% of their sales over that period! Do the math! Sounds to me like Costco is already in trouble financially if a .0125% drop in revenue is such a problem. My advice to Costco is stop paying high wages and benefits to employees and give the customer a break on prices! Heck, fire a few of them once in a while and you could actually lower prices - that will increase sales and profits in one fell swoop! You may also want to check on how many are spamming this forum on company time! Or are you paying them bonuses just to do so?

dsmith,

I think your math is incorrect. If TV's are 5% of sales and 25% are returned, that is 1.25% of their total sales.

Regarding your advice to just start firing some folks and chopping wages and benefits, again, costco is beating all other big-box retailers hands-down, even with the money they're losing on their return policy. This suggests (although it doesn't prove) that Sinegal's model of trading high wages and benefits for increased company loyalty and employee retention, and decreased theft works. And, again, there are some people who shop at costco precisely because costco is a company which is known to treat their workers well. Firings and benefit slashings will lose the loyalty of not only the workers, but also some portion of the customer base.

Of course it is true that a slash-and-burn approach would temporarily bump revenue. The question is whether it is a wise long-term approach. This requires a company to take into account all foreseeable effects of the actions they are considering.
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post #3647 of 3647 Old 03-01-2007, 02:25 PM - Thread Starter
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Costco/BB/CC/Sears/Dell et al Master Thread II: NO PRICING /NO COUPONS

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