Costco is a favorite of customers for many reasons. The big-box store’s devoted fan base has plenty of perks to love, including affordable gas with the Top Tier classification to promote better engine performance, affordable and high-quality Kirkland brand products, and, of course, the store’s famous $1.50 hot dog and soda combo.
Not everyone is entirely happy with every Costco business decision, though. And unfortunately, one particular business practice has done more than make customers mad. Some customers believe Costco is using a misleading pricing tactic that could actually violate the law.
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To address this serious issue, a woman in California has now filed a class action lawsuit against the company.
The suit was filed in the U.S. District Court for the Western District of Washington, but because the plaintiff seeks class certification, it’s clear that the intent is to open up the door for potentially thousands of consumers nationwide to join in the claim if they feel they were similarly tricked.
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Lawsuit claims Costco isn’t being transparent on its prices – and consumers are paying the price
Lead plaintiff Christina Zaimi filed the claim against Costco. She alleges that Costco engaged in misleading business practices when the company offered “free shipping” online while quietly hiding the shipping costs by inflating the price of products.
Zaimi said she paid $250 in extra costs when she purchased a sectional sofa from Costco.com in December of 2024, compared with the amount that she would have paid for the same item if she bought it in-store, despite the fact that Costco’s website promised free delivery.
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“Costco represents that consumers are paying $0.00 for shipping,” the lawsuit states. “In reality, Costco inflates the price of the product itself to include shipping costs.”
The plaintiff claims that this pricing model violates state and federal consumer protection laws and represents a breach of contract, a breach of warranty, and false advertising. The suit claims she wouldn’t have completed the purchase online if she had known she was paying a higher price.
The suit also claims others may have been misled in a similar way. “Consumers are more likely to make purchases — and to pay a price premium — when they believe they are receiving free shipping,” the complaint states.
If the class action is certified, any Costco customer who feels they were tricked into a purchase by promises of free shipping may be able to join the claim and pursue compensation for their resulting financial losses.
Costco has a disclaimer — but is it enough?
Costco does have a disclaimer on its website stating that online prices “take into account shipping and handling fees not applicable to warehouse purchases.”
However, the lawsuit alleges that the disclaimer is difficult to find on the Costco website and is not visible at all during the online checkout process. The disclaimer appears on a customer service page, while the site presents the shipping cost for items as being $0 or totally free during checkout.
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According to the complaint, the tactic of not showing shipping costs while building them into the price is misleading to reasonable consumers. In other words, customers may believe that the online and in-store prices are equivalent, since they aren’t being told when they check out that the online price is adjusted to account for items being sent to their home.
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It remains to be seen how the court case will play out, but in the meantime, anyone shopping Costco online can learn from this plaintiff’s mistake and should understand that they very likely will pay more for their online versus in-club purchases.
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