Costco inconveniences customers

Costco inconveniences customers

By Lee Hyo-sik Costco Wholesale Corporation, the U.S.-based membership warehouse chain that operates seven outlets here, is facing growing criticism from Korean customers over its payment policy that requires shoppers to pay for purchases with cash or credit cards issued only by Samsung Card, in contrast to wholesale and retail stores. This exclusive business partnership with the card unit of the country’s largest conglomerate has inconvenienced many consumers who do not carry a Samsung credit card. Consumer advocacy groups say Costco’s payment policy is solely designed to avoid high transaction fees it would be required to pay to card firms — the wholesaler pays Samsung only a 0.7 percent in commission. Competitors pay plastic issuers about 1.5 percent of the total charged amount in a transaction fee. They say Costco should end the exclusive contract with Samsung Card, which they argue compromises consumer interests. They argue consumers should have other credit card options when paying for merchandise. Costco refused to explain the reasons behind the exclusive deal with Samsung Card, saying it did not want to discuss the matter. Park Mi-kyoung, 43, who shops at Costco once a week for bottled water and other household items, say she would prefer the wholesale outlet to allow her to use non-Samsung credit cards. “I have many other cards that get me rebates and other benefits. But Samsung Card does not provide me with such perks at all. So obviously I really would like Costco to let me use other credit cards,” said the housewife residing in southern Seoul. “I also want the wholesaler to stop charging me a 35,000 won annual membership fee. It feels like Costco’s membership fees and other polices are less customer friendly, compared to other companies,” Park said. Costco customers have been unhappy about its payment policies. “I go to shop at Costco’s Dangsan store on a regular basis. But I did not know it only accepts credit cards issued by Samsung Card,” an executive at Korea Woman’s Association. “This policy is tantamount to an unfair practice at the expense of customers. Our organization will look into this issue. If its policies are proved unfriendly toward local consumers, we will take all possible action to correct them.” She then said the U.S. wholesaler should stop charging an annual membership fee to be eligible to shop there. “Shoppers at E-Mart and other large stores here do not pay to enter and shop. Costco should correct these ‘unfair’ policies and do more to improve consumer wellbeing.”