Thursday, June 23, 2016


Costco, the wholesale retailer, has a disaster on its hands.  The company ended its credit card agreement with American Express and moved to Visa.  The problem is that Citibank, which is issuing the Visa cards, has bungled the job.  Rather than just blaming Citi, irate shoppers are haranguing Costco about the mess.  Some have vowed to stop shopping at Costco stores because of the botched transition.  The problem is that there isn't much Costco can do to straighten out its vendor.  It has to wait until all cards are issued then try to rebuild good will with customers.  One can ask how it came to this in the first place.  Was Citi too confident that it could handle the job?  What are the fallbacks Citi should have had in place, or did they fail as well?  One can imagine the pressure both companies are under, especially knowing that it didn't have to happen this way.


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