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Costco Slammed for "Deceptive" Warranty Policy

A new lawsuit against Costco is calling its "free replacement" warranty into question.

Costco is where consumers go when they're looking to stock up with good deals. Sometimes, however, shoppers say that the wholesale retailer overpromises and under-delivers. Recently, Costco came under fire for its tuna, with a lawsuit claiming that the company falsely advertises its products as "dolphin safe." Now, a new lawsuit has been filed, alleging that one Costco warranty policy is "deceptive." Read on to find out why the retailer is under fire.

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Costco sells automotive batteries with warranties.

Various type of food for sale in Costco Wholesale . Members-only warehouse selling a huge variety of items including bulk groceries, electronics & more.

If you're a Costco member, you can buy automotive batteries at your local store. The wholesale retailer sells Interstate brand batteries for a number of different vehicles, including standard cars, boats, RVs, golf carts, and lawn mowers.

With a purchase of one of these batteries, Costco says that members are also provided with a "great warranty" for the product. "A 36-month limited replacement warranty supports all Costco car batteries," according to the company's website.

"If there is a defect in material or workmanship (not merely the battery being discharged), this limited warranty provides that upon return of the battery to any Costco Wholesale warehouse, excluding Puerto Rico, the battery will be replaced or the purchase price refunded, excluding fees and taxes," the retailer sates in its warranty policy. "To obtain a new battery or a refund under this limited warranty, the original battery must be returned to Costco Wholesale within the warranty period."

The retailer is now being sued over this policy.

Interstate Batteries on shelves inside Costco

Some consumers believe that Costco's battery warranty isn't all it's cracked up to be. Florida customer John Skrandel is leading a consumer lawsuit against the wholesale retailer over its policy, the Sun Sentinel recently reported.

In 2017, Skrandel purchased an Interstate Battery with a 36-month replacement warranty for $72.99 at a Costco in Palm Beach Gardens, according to the newspaper. In his suit, Skrandel claims that when he returned to the store 19 days before his warranty expired to replace his defective battery, he had to pay for a new one—and pay more for it than he had originally, in fact.

Skrandel said he was given a refund for the original price, and then told the new battery would cost him $78.99, which is an additional $6.

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The suit claims that Costco's warranty is "deceptive."

Membership counter at Costco
dennizn / Shutterstock

Skrandel is seeking to sue Costco on behalf of all consumers who purchased an Interstate Battery from the retailer with the belief that they would get a free replacement if theirs died within 36 months.

"Costco's scheme is deceptive to reasonable consumers, such as [Skrandel], who expect that when returning their defective Interstate Batteries under Costco's advertised Free Replacement Warranty, they will receive a replacement battery at no extra cost, or, at the very least, have the purchase price of their Interstate Battery refunded and then be charged for a replacement battery at the same price," the suit states.

If certified, the case would cover all U.S. and Florida buyers of Interstate Batteries between Sept. 1, 2014 and Dec. 31, 2019, according to the Sun Sentinel. The newspaper reported that Costco stopped labeling batteries with free replacement guarantees in late 2019 and replaced them with batteries that now say "Limited Warranty Replacement."

The retailer admitted to an error in overcharging Skrandel.

paying for hot dog at stand
Frank11 / Shutterstock

In the Feb. 9 court filing for class certification, Skrandel's attorneys said that Costco had a policy in its Refund Manual that requires any additional cost for a free replacement battery be discarded at the cash register. But the Florida consumer alleged that this did not happen when he attempted to take advantage of the warranty.

In a July 2021 response to Skrandel's initial complaint, Costco acknowledged "that its records show Plaintiff purchased an Interstate Battery with a 36-month warranty period and an error led to Plaintiff paying $2 for his replacement battery," the Sun Sentinel reported.

But the retailer denied the other allegations in Skrandel's suit, and said that consumers can return defective Interstate Batteries "consistent with its warrant and return procedures" and then receive a replacement in return "at no additional cost," according to the newspaper.

Best Life reached out to Costco about Skrandel's claims and the lawsuit, but has yet to hear back.

Kali Coleman
Kali Coleman is a Senior Editor at Best Life. Her primary focus is covering news, where she often keeps readers informed on the ongoing COVID-19 pandemic and up-to-date on the latest retail closures. Read more
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