Last week I wrote about the painful transition Costco customers are experiencing as the retailer’s relationship with American Express ends and a new co-brand partnership with Citi begins. The post included some missed opportunities in providing a better customer experience. As it turns out, more pain is yet to come.
My first trip to Costco since receiving my new card resulted in a decline—not of my Citi Visa, but my Costco membership. Apparently many of the new credit cards recently issued have the wrong membership numbers tied to them, so when scanned at the Costco checkout counter they result in an invalid or expired membership. Fortunately the clerk was aware of this issue, completed my purchase, explained the situation and directed me to the customer service desk for resolution.
An extremely apologetic Costco employee issued a new membership card to be used in conjunction with my credit card for purchases in the warehouse and at the gas pumps. He informed me that new cards were being mailed by July 9 to all customers affected by the inaccurate membership numbers.
Interestingly, the same day a new Citi card arrived in the mail. I assumed it was the card being reissued with the correct membership number, but it was identical to the one already in my wallet. In the meantime, my spouse has yet to receive his new Citi card. Confounding because now I have two incorrect cards, and waiting for a third that has the updated Costco membership information.
With yet another misstep in the transition, the good news is that our local Costco (and I assume other locations) now have a dedicated area with computers set up for contacting Citi to get card issues resolved in-store. Employees also seem to be better trained in managing the situation.
The bad news is this is likely to be an expensive lesson learned. When you add up the missed transactions caused by the delayed issuance of cards, the cost of replacement cards (not just one, but two, possibly three for some customers) and loss of business as Costco shoppers choose to go elsewhere, the price tag grows higher. I’ve heard from several Costco diehards, who shop there weekly, that they have been waiting for their new card to arrive before they make their normal run. I couldn’t help but wonder if their loyalty will carry them through further hiccups once their new cards are in hand.
The ultimate price for Costco is the loss of customers because of the hassles.
Zoot Blog will provide future updates as Costco and Citi continue to work through these bumps in the road.