Costco Shows How the ‘Credibility Bank’ Pays Dividends

Thom Weidlich 08.31.23


Here’s an example of how it pays to have a hefty deposit in the “credibility bank.” Costco, a hugely admired company, had a crisis hiccup when a batch of its Kirkland-brand vodka “tasted like lighter fluid” (in the words of one customer). Costco handled the situation well. And we bet it won’t be too harmed by the incident because of that strong reputation.

Some weeks ago, people began to complain, especially on Reddit, about the taste and smell of Kirkland Signature American Vodka. One Reddit user likened it to “a bathroom urinal puke vibe,” according to the New York Post (which says the hooch has a “cult-like following”). Costco reportedly sells the stuff for $16.99 for a 1.75-liter bottle.

To its credit, the membership-only, big-box-store company, based in Issaquah, Washington (near Seattle), didn’t ignore the problem. It emailed members a product-information notification that said a batch of vodka it sold between June 12 and Aug. 10 “does not meet our quality expectations.” It offered a full refund.

“It has come to our attention that the taste profile of units marked with certain lot codes may not have met the expected profile normally consistent with this product,” Costco said. There were no food-safety issues involved, it added. It removed affected bottles from the shelves, according to Nexstar.

Beloved Company

So Costco has done a good job responding to the crisis. As we say, we don’t believe its image will take a hit over this, partly because it’s so beloved. In this year’s Axios Harris poll, Costco was ranked the second-most trusted U.S. company (after Patagonia). It shows the importance of overall reputation when a crisis hits.

Though it didn’t here, this type of situation has the potential to spiral out of control. Rumors run rampant. Alas, someone who self-identified as a Costco employee posted on Reddit that an improperly cleaned container led to the vodka having an added taste of rum. That information may be correct but, with an incident like this, you really want the company to speak with one voice. Employees should be encouraged to refrain from making public comments in a crisis.

Another negative, according to the Post: LeVecke Corp., which conjures up the spirit for Costco, didn’t return the paper’s call for comment. Sure, few people will know that it’s ultimately the booze’s maker, but it should still tell its side of the story. We couldn’t find anything about it on its website. And Costco’s email to customers said to call LeVecke with questions.

Photo Credit: ZikG/Shutterstock

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