Joan, 79, a widow in Myrtle Beach, South Carolina, got an email inviting her to take an online survey about Costco Wholesale. A former customer, she didn’t hesitate, thinking it was a way to entice her to return. She was promised a gift for answering the survey and chose “a little, tiny, one-ounce bottle of CBD oil, because I never tried it.”
A retired postal worker, Joan used a debit card to pay a $5.95 fee for shipping and handling. Instead, she was charged $95 — more than she had in her checking account — and slapped with a $35 overdraft fee.
Aghast at the CBD oil’s price tag, Joan used certified mail to return the package to the company and records show it arrived Jan. 7. She’s called a toll-free number for the company multiple times for a refund, to no avail. “I have spoken to 11 different customer service guys,” she says, and “received 11 different excuses.”
AARP is not naming the business. Its address is a UPS Store near Los Angeles; it is not registered with California; and a call to its phone number went to a call center, where a supervisor, “Marco,” when asked about the potential fraud, said he did not want to be rude, but was hanging up. And he did.
13 Costco scams to avoid
Scams add up to a baker’s dozen
Joan is not alone in having been ripped off by crooks who hijack Costco’s name — and hide behind it — to steal cash and personal data. These criminals reach out in emails, texts, phone calls and posts on social media.
“It is an unfortunate fact of the Internet that at any given time there are numerous illegitimate pop-up ads, surveys, websites, emails, social media posts and advertisements that purport to be from or authorized by Costco,” the retailer says on its website. “It is unlikely that Costco is affiliated with these promotions.” The site lists 13 “currently known scams” including:
- A fake Facebook post showing a photo of Costco CEO Craig Jelinek who promises a “free Christmas food box” with $250 in groceries plus a $35 Costco “voucher” delivered straight to the door of every person who shared the post within 24 hours.
- A sham offer of a free Samsung 4K television — providing you complete a survey — as a way to “personally thank you for always paying your Costco Companies Inc. bills on time.”
- A phony offer of a $500 Costco Travel credit or Shop Card for completing a survey or a reduced-price travel package in exchange for giving up personal information. (A Costco Shop Card is a reloadable card used to pay for items.) This scam starts in phone calls to both members and nonmembers, the site says, and some calls are “spoofed” so that the number on CallerID looks local.
Giant global footprint
Costco has 559 warehouse stores in the U.S. and 247 in other countries. Why are its no-frills megastores popular? They may not be Arlo Guthrie’s Alice’s Restaurant of film and song, but you can get almost anything you want at Costco: a hot dog and soda for $1.50; organic fare and junk food; flowers and wine; dog chow and diamond rings; clothing, appliances and electronics; a vacation and, for one’s final journey, a casket.
People pay an annual fee starting at $60 to shop at Costco, which reports 108.3 million cardholders worldwide.
Anti-scam advice online
Costco posts lengthy anti-scam guidance online. Richard A. Galanti, executive vice president, chief financial officer and a company director, said this in a short phone call: “We handle it, and the less said about it, the better from the standpoint we don’t want to send others out to do it.”
Costco is based in Issaquah, Washington, outside Seattle, and in 2019, Galanti spoke to The Seattle Times about a Costco scam that went viral on Facebook. It seemed so real that his sister reached out to him to ask if it was true: Was the company offering a $75 coupon for its “50th anniversary”? (Costco was about 36 years old then.)
Scams “come and they go periodically,” Galanti told The Times. “We’ve all clicked on something and afterwards realized we shouldn’t have.”
Last year, the National Retail Federation ranked Costco as the nation’s fourth-largest retailer after Walmart, Amazon and the Kroger Co. Amazon, too, warns people about fraudulent emails, web pages, calls and texts that exploit its name.
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Hit your pause button
AARP’s Amy Nofziger, who oversees its Fraud Watch Network Helpline, 877-908-3360, tells people that if they are evaluating a suspicious offer they should pause and talk to a trusted friend. “Ask yourself, Why would Costco be giving away a $500 gift card for filling out a survey? Does that seem reasonable? They seem to be doing really well on their own,” she adds.
Here’s more advice from Costco’s website:
- Unsolicited electronic communications from Costco do not ask for information such as username, password, credit card number, birth date or Social Security number.
- If you receive an order confirmation for something you didn’t order from Costco.com, do not click on links or open attachments.
- If you receive a communication that looks like it’s from Costco, check who sent it. Check for typos, misspellings and email addresses that do not end in “@costco.com.” When in doubt, don’t respond.
- Be aware of an email campaign advising people that Costco is offering them a job. The emails may request a sham “processing fee” of several hundred dollars, which the company says it never charges job hopefuls.
- If downloading the Costco app, make sure it is genuine.
Joan, like plenty of other consumers, says she had never read any of that online advice before ordering the CBD oil. Today she wishes she’d used a credit card for its stronger fraud protections. The worst part, she says, was the “chaos” at her bank, where she had to freeze her account, close it and open a new one, creating red tape over her direct deposits and automatic payments. Still, she doesn’t blame the retailer, saying the fraudsters are at fault since they stole Costco’s name — before disappearing with her cash. “I’m speaking out,” she says now, “in the hope that I can save at least one person all this grief.”
AARP’s Fraud Watch Network can help you spot and avoid scams. Sign up for free Watchdog Alerts, review our scam-tracking map, or call our toll-free fraud helpline at 877-908-3360 if you or a loved one suspect you’ve been a victim.
Marie Rohde is a writer who formerly worked for the Milwaukee Journal Sentinel. Her byline also has appeared in Bloomberg News, the Los Angeles Times, the Chicago Tribune and Milwaukee magazine.