There is a buzz on the internet with people trying to discover what happens to Costco returned items so that they can try to acquire them for themselves, whether that be for individual use, or to sell to customers in a retail business.

Let’s explain the Costco returned items process so that you get an understanding of where Costco returned items come from, and why the stores deal with them the way that they do.

As you probably know, Costco has an extremely flexible returns policy which allows customers to return items to the wholesale giant even if they have been used and damaged. More recently, this policy has been tightened in that some high ticket items must be returned within 30 days of purchase if a customer finds that they are faulty.

One point that has customers continuing to return to shop at Costco is that you don’t need a receipt to return an item to the store. The reason for this is that because Costco wholesale is a membership shopping experience, they are able to search back through their computer and check the purchases that were made against your membership. This is how they can ensure that you are not returning stolen goods for a refund.

What happens next is that Costco place all returns in a returns bin in the warehouse. Returns may be damaged items, clothing of the wrong sizes and unwanted items. The store cannot guarantee which items will be returned, and so this really is a ‘mixed lot’ of items.

Because the wholesale giant doesn’t want to spend time and money going through the items that are returned, they place contracts with liquidations merchants for to bulk purchase Costco returned items. This is also the case with items that are overstocks, liquidations and closeouts.

The liquidations merchants that usually have contracts for Costco returned items will also be wholesale suppliers that deal with end-retailers. So therefore, if you are a retailer looking to purchase stock at heavily discounted prices, sourcing Costco returned items from your wholesale supplier can be a great way to get good quality items for your business.

However, as mentioned before there is no guarantee that the Costco returned items will be a-grade quality products. In fact, you should expect that when you make a bulk purchase of Costco returned items from your wholesale supplier, you will receive goods in varying conditions.

If you are looking for drop shipping arrangements, you may find that it is difficult to drop ship Costco returned items, unless you are reselling them in bulk to your customers. If you are a retailer that markets your products to people that are looking for discounted goods on eBay or at flea markets, then this can be a viable option.

Of course, Costco returned items are not able to be returned to a Costco store for a refund, and to prevent this practice, the items may be discreetly marked as being returns. This fraud prevention strategy is in place so that wholesale agreements can continue.