Costco tightened returns enforcement and rolled out new mobile app ordering for custom cakes and deli trays in early 2026 across its warehouses to curb losses and boost efficiency. According to a report, the digital change replaces decades-old paper forms and aims for full adoption by year-end.
Retailers faced about $103 billion in fraudulent returns and claims in 2024, a factor pushing policy shifts (Ed. note: this figure covers U.S. retail estimates). Gaurav Saran (see his profile) said, “Retailers began offering competitive return policies to build loyalty as consumers became more reliant on online shopping. But that also led to some shoppers taking advantage.”
Stores now track return frequency and dollar amounts per membership, flagging accounts that require manager approval. Electronics keep a 90-day window with stricter receipt rules.
Costco said the app upgrade will cut labor, streamline inventory, and capture customer data to inform merchandising. CEO Ron Vachris said, “Custom cakes and deli trays are moving to a digital state.”
The moves aim to protect margins and reduce shrinkage while expanding operational efficiency. Analysts note COST trades near $1,018 with a P/E of about 52, an average price target around $1,016, roughly 81 million membership households, $66 billion in quarterly revenue, and a 193% five-year total return.
Executives and analysts will watch membership renewals and upcoming quarterly reports to gauge whether stricter returns and digital ordering support profitability without hurting customer loyalty. “Returns are a significant cost for retailers, and the rise of online shopping could increase this trend.”
