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UPDATE 2: November 2020, the Costco executive membership class action settlement is now open. Click here to file a claim.
UPDATE: On Feb. 21, 2019, a federal judge rejected Costco’s motion to dismiss class action allegations that the wholesale retailer refuses to refund membership fees to their customers.
Last week, Costco Wholesale Corporation was hit with a class action lawsuit accusing the company of withholding a portion of the money refunded on cancelled store memberships.
According to the Costco class action lawsuit, Costco is the second largest retailer in the world. The company operates “member warehouse clubs” that require consumers to purchase memberships in order to shop at its stores.
Plaintiff Scott Pearlstone of Missouri says that Costco maintains a 100% Satisfaction Guarantee on its memberships and merchandise. This guarantee allegedly promises consumers that they may cancel their memberships and receive a full refund of their membership fees if they are dissatisfied.
“Despite this guarantee, Defendant has a practice of refusing to reimburse the full amount of membership fees to certain members who cancel their memberships,” which is a breach of Costco’s 100% Satisfaction Guarantee, the Costco class action lawsuit says.
Pearlstone alleges that all consumers who seek to become members of Costco must complete a membership application and agree to Costco’s membership privileges and conditions. One of these terms includes a “Risk-Free 100% Satisfaction Guarantee,” the Costco class action lawsuit says. This guarantee is prominently advertised throughout Costco stores and on the Costco website, according to Pearlstone.
However, Costco “repeatedly and systematically breaches its Risk-Free 100% Satisfaction Guarantee by failing to provide full refunds of membership fees to executive members who cancel their membership, instead refunding less than the amount originally paid for such memberships,” the Costco class action lawsuit says.
Instead of reimbursing the full amount of fees paid for executive memberships, Costco allegedly “reduces the amount of cancelling a member’s refund by the amount of store credit earned as a part of the executive membership’s 2% reward program,” the Costco class action lawsuit alleges.
“Thus, an executive member who cancels their membership does not receive the full value of what they originally paid for their membership,” Pearlstone alleges.
“Defendant’s practice of failing to refund the full value of executive members’ membership fees is a breach of Defendant’s Risk-Free 100% Satisfaction Guarantee, under which Defendant promises to cancel and refund membership fees ‘in full’ at any time a member is dissatisfied,” the Costco class action lawsuit says.
Pearlstone alleges that he enrolled in a 12-month executive membership with Costco, but he became dissatisfied with the experience and cancelled his membership. However, he was refunded only $86.13 instead of the $110 membership fee he originally paid, the Costco class action lawsuit claims.
He filed the Costco class action lawsuit on behalf of himself and a proposed Class of consumers in the United States who purchased an executive Costco membership, cancelled the membership, and were not refunded the full value of the executive membership fee they originally paid. Pearlstone also seeks to represent a Missouri subclass.
The Costco class action lawsuit asserts claims for breach of contract, unjust enrichment, and violation of the Missouri Merchandising Practices Act.
Pearlstone is represented by Lanny Darr of Darr Firm and by Myles McGuire and Paul T. Geske of McGuire Law PC.
The Costco Satisfaction Guarantee Class Action Lawsuit is Scott Pearlstone v. Costco Wholesale Corporation, Case No. 4:18-cv-00630-RLW, in the U.S. District Court for the Eastern District of Missouri, Eastern Division.
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17 thoughts onCostco Class Action Lawsuit Challenges 100% Satisfaction Guarantee
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I still have my executive card. N proof add me to lawsuit. I made 6 people get that card n never got the benefits
My refund was never returned and I had to pay full price of regular membership, with no credit for stepping away from executive membership.
My Refund was also not fully refunded.
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