After a 16-year partnership, Costco is no longer accepting American Express, and the brand’s transition to Visa has been less than smooth.
The Costco-branded American Express cards that many customers used for their purchases have been cut up, but customers have had issues in the transition to the Citigroup-issued Visa cards.
Some have had trouble activating their cards and others didn’t receive them. Others were wrongly billed for purchases they had already paid off.
The New York Times called it “a customer service fiasco.”
In-store systems have had no trouble processing payments, but the roughly 11 million credit card transitions outside of that has caused a significant PR problem for Costco.
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Citi has previously been in the spotlight for poor customer service records. It’s reported that customer service center weren’t staffed properly to handle the volume of calls and complaints.
American Express was originally criticized for allowing the partnership to lapse, but a company rep said the “numbers didn’t add up” on a recent earnings call.
From The Motley Fool:
It's too early to call the new Costco-Citigroup-Visa partnership a flop. However, given how many customers Costco has alienated in the past week -- many people have threatened to cancel their memberships, though most probably won't follow through -- it's reasonable to question whether switching credit card companies was shortsighted on Costco's part.
What do you think PR Daily readers, did Costco underestimate the value of a partner with a strong customer service track record?
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