Costco is giving up its competitive advantage!

I read the article, "Costco tightens return policy on electronic", appeared on the internet website, http://www.msnbc.msn.com/id/17350641/. This article mainly talks about the change of Costco's return policy that it will allow to give customers only 90 days to return televisions, computers, cameras, camcorders, portable music players and cell phones. According to the article, the reason is that many customers are taking advantage of having six month to get full refund. By giving too long period time to use Costco's product, Costco is actually experiencing difficulties such as providing newer product for less price and big cost drops by returning of older item. In order to avoid these situations, Costco starts to post new return policy on its website and plans to activate it gradually in a short period of time. Along with that, Costco also plans to provide more technical support and extend its warranties in order to prevent possible serious complaint from its old customers.

When I read this article, I felt that we are going to lose "Costco" that we used to know. Costco has been very successful during the last several years because of its generous return policy, lower price, and good quality of product. However, Costco is now giving up one of its core conpetencies in order to prevent loss of sales caused by practicing too generous return policies. Personally, I do not think it is a good idea. It is true that Costco might lose some sales because of customers who want to use its return policy in order to take their own advantage. However, by changing its generous return policy which has been parcticed since long time ago, many customers will feel betrayal. Because they used to enjoyed its return policy but they can not enjoy it any longer from now. In reality, Costco might lose some customers because of changing its return policy. Guess what? Costco will eventually experience even more loss of sales by losing those loyal customers. I hope Costco to keep its competitive advantage, generous return policy, as it was to prosper its business even more than ever before.