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)).