Return of a Costco Contract by an Exclusive Customer – Label Sanitation and Preventing Fraud

17th July, 2010 - Posted by admin - No Comments

You will need to familiarize yourself with a few more terms if you still have an interest in an exclusive contract for customer returns with Costco.

Jaeger leCoultre Watches

. In Part 1, I discussed the matter of obtaining a contract, who you\’ll need to contact, and the expectations when picking up Costco customer returns when it comes to wholesale liquidation.

Real liquidation goes farther than just an early pickup time. Because you are a liquidator, the responsibility to protect your supplier from fraud on a return with label sanitation lies with you. Original suppliers, Costco in this case, expect no never have to deal with a product once it\’s fully liquidated. This is the way you make certain this happens.

Return Fraud on Liquidated Products

Having a salvaged item return to the front end of their return desks is the last thing that any Costco wants to happen. As dishonest as this sounds, it\’s not hard to do and does happen often. You might ask yourself \”How does something like this happen?\”.

1. Salvage batches are sold to a contracted liquidator by Costco. That wholesale liquidator then markets those customer returned products. The customer returns get resold in case lots, to a retail store, or sometimes on eBay or flea markets. The customer who bought the salvaged customer return then pays a visit to their local Costco so that they can get a full refund. They can do this even if they lack the store receipt, because of the refund policy which honors them with store credit or an exchange for a newer item.

For example, a customer returned camera can end up in the hands of someone else for as low as $60.00. Then they will take it to a Costco for a refund, and the refunded amount for that camera can be as high as $199, and above. Although they may not get a full refund, in store credit obtained by fraudulent means is still stealing from Costco, and any other outlet.

Prevent

It is the responsibility of a liquidator to stop fraud returns. Because, why would Costco want to sell returns just to have them re-returned? Any easy label sanitation method will effectively stop any return fraud thieves.

*Remove anything that may lead back to the original source. Store stickers and sale tacks may often be placed on the items themselves. There are a few Costco exclusive brands, like Kirkland. Have knowledge of brands are clearly from Costco and make sure to handle them with care. This is where you need to be careful– draw the black line using a permanent marker on the bard code so that customer return agents cannot can an item back in. Don\’t disfigure or remove the serial or model number. That is an indication that the property is stolen, not liquidated.

Tricks and Tips for Label Sanitation

Although it is a lot of work to perform label sanitation. Assure that contract with Costco, or whatever retail outlet your contact is with, clearly states your responsibilities of label sanitation. Make differentiations of high-risk and low-risk customer returns. Liquidated items like paper gods, household staples, and foods have a low personal gain if returned so it is not likely. There are numerous red flag categories on customer return fraud, like:

*Clothing

*Electronics

*Appliances

*Watches/Jewelry

All labels must be sanitized especially high risk categories like clothing, electronics, jewelry, and appliances. Disabling a bar code can be done easily and quickly with a black permanent marker. To denote that they are of returned status the clothing tags should be marked with a black slash on the brand name. When the clothing tag is dark, you can use silver or gold permanent ink instead so it stands out.

Marking electronics and other large appliances with the word \”SALVAGED\” is another strategy you can try. You might see this done in grease pencil and other colored marking. Be cautious when you submit to this practice. First, make sure you are able to place this term near the model number in a discrete manner or somewhere else that customer return agents might search for information. The reason being is that you still need to resell these things, whether to a discount retail market or another wholesale distributor. Wholesale buyers and customers are cautious when buying products and liquidated electronics when they are labeled \”SALVAGED.\”

The creation of effective strategies that stop customer return fraud is a valued service that you offer as a liquidator. Large retail stores, such as Costco, will bring this up without a problem because it saves them from fraudulent returns. It will take negotiation when you handle label sanitation, but you will need to make sure you retain your ability to resell an item. Lastly, you will show your supplier how valuable you are as a professional player of the industry because of your knowledge in label sanitation. .