The Common Costco Gift You Absolutely Cannot Return

Costco is full of great gifting ideas, from small appliances and televisions to cookbooks and even bicycles. It also happens to be a great place to buy gift cards — not just for Costco, but for plenty of other retailers and restaurants, too, including coffee shops, popular fast food spots, and several steakhouse chains. Plus, they can be purchased in-store or online. However, it's important to know the return policy if you do want to purchase a third-party gift card through Costco. Once paid for, they're not returnable.

Most retailers do not allow gift card returns because of the way they're processed in a store's system. They're considered cash, and this makes returning them difficult from both an accounting standpoint and a fraud control standpoint. Allowing gift card returns could increase the likelihood of something called chargeback fraud, which occurs when someone makes a legitimate purchase then disputes it. In the case of gift cards, a person could purchase a gift card, use it in its entirety, then claim that the card was never authorized or used, and request a refund (called a service utilization chargeback). Stores would rather not open themselves up to the option of chargebacks and instead just have a hard-and-fast "no returns" policy.

While the general consensus is that gift card returns aren't allowed at Costco, there are some exceptions based on state laws. In California, consumers are able to request a refund on a gift card if the remaining gift card amount is less than $9.99. The purpose is to ensure consumers are getting the full value of their card. Sometimes, when you have so little cash left on a card, it's hard to find a way to use it, which is where these small refunds come in handy.

Note that $10 is just over the maximum refund of any state. Colorado allows a refund request for anything $5 or below, and there are six states where a refund can be issued for any balance of $4.99 or less: Maine, Massachusetts, Montana, New Jersey, Oregon, and Washington. Rhode Island and Vermont both allow gift card refunds of 99 cents or less.

If you want to purchase Costco gift cards but need to make sure the gift recipient gets use out of them, you can keep them more generic. Treat them to a steak dinner at a quality chain restaurant with a gift card to Fogo de Chão, or to something more casual like California Pizza Kitchen or Alamo Drafthouse.