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Call 4 Action: Costco Settlement Offers Membership Credit

Class Action Lawsuit Filed Over Back-Dating

POSTED: 4:29 pm EDT May 4, 2009
UPDATED: 7:41 pm EDT May 4, 2009

In a lawsuit, some Costco members claim they were paying for a full-year membership, but actually getting less than that.

The lawsuit says Costco unfairly back-dated membership renewals for customers who allowed their membership to lapse.

Many Costco customers may be eligible to get some of that time back because of a class-action lawsuit.

Call 4 Action reporter Aaron Saykin said Costco customers have been receiving e-mails or postcards alerting them to a court settlement.

PDF: Read The Settlement Document
Link: Costco's Customer Service Web Site

As part of the settlement, Costco agreed to give all affected customers anywhere from one to three months' worth of free membership time, depending on how much time they lost.

For example, if your annual membership expired in January but you chose not to renew it until March, your start date for that next year would still be listed as January.

Customers who lost at least three weeks of membership time from March 2001 through March 2009 are eligible.

Costco says it will automatically credit current members with extra time, while former members will get vouchers by mail.

Costco also changed the controversial policy, but the company did not acknowledge any wrongdoing. It said that the suit "... lacks merit" and that the policy was "... fully disclosed... in Costco's membership agreement."

"The bottom line is that the Costco mystique is worth billions of dollars and they don't want to threaten that," said Jeffrey Inman, of the Joseph M. Katz Graduate School of Business at the University of Pittsburgh.



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