Pod Insights The Clark Howard Podcast 01.26.26 Regular Retail Vs Costco / The Newly Expanded ABLE Account About this episode Today - A tale of two retail experiences. Merchants are getting eaten up by the cost of returns and stiff new policies are reflecting that, with strict deadlines and fees as high as $45 to process mailed items. By contrast, Costco continues to lead with customer-friendly policies, including a little-known "price drop" perk. Also - The ABLE (529A) program has undergone significant expansion, with millions more people now eligible. Clark breaks down everything you need to know, including a NEVER NEVER rule to protect your wallet. Many Unhappy Returns: Segment 1 Ask Clark: Segment 2 The Updated 529A: Segment 3 Ask Clark: Segment 4 Mentioned on the show: Costco Home Insurance: 5 Things To Know Before You Buy It Costco Car Insurance: 5 Things To Know Before You Get a Policy Travel Alert: New Requirement for UK Travelers European Travel Information and Authorisation System (ETIAS) What Is an ABLE Account? 10 Clark Howard 'Never, Not Ever' Rules To Protect Your Money Clark.com resources: Episode transcripts Community. Clark.com / Ask Clark Clark.com daily money newsletter Consumer Action Center Free Helpline: 636-492-5275 Learn more about your ad choices: megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices
Transcript 0:01 Speaker 00 Life is all about making decisions. Sometimes you make questionable ones, like buying a new TV that's too big for the wall because the electronics store employee was a little too good at their job. Then, sometimes you make great ones, like protecting your home and auto with Progressive. You get customized coverage options, so you can be sure you have the right coverage. Get your quote today at progressive.com. Progressive Casualty Insurance Company affiliates and other insurers. Not available in all states.
0:29 Speaker 01 Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
0:42 Speaker 02 Price and participation may vary. Promotion pricing may be lower than meal pricing.
0:50 Speaker 03 I'm so glad you're with us on The Clark Howard Show, where our mission is to serve you with advice and information that empowers you, so you make better financial decisions in your life. One decision I hope you'll make is sign up for our free newsletters at clark.com/newsletter, or newsletters, either gets you there. I'm really, really proud of the newsletters that we edit for you. Never to waste your time, instead to give you information that empowers you, that you can make decisions on. That's what it's about.
1:31 Speaker 03 Today, I've got a tale of two very different retail experiences going on right now, that I want to make sure you are tuned into. And later, do you know what an ABLE account is? Well, I'm going to fill you in on ABLES, and how they've become more ABLE here in '26, who they benefit, and the much wider pool of people that can now participate. So back in 24 was the first time I ever talked about this. And it was just kind of almost like a test going on.
2:09 Speaker 03 And now has become a huge problem for you shopping retail, online, in person, for yourself or for gifts for others. And a lot of people who've been trying to return gifts that they received this past Christmas, now in January are discovering, hey, I missed the deadline to return this. Or I'm getting charged a fee to return it. It's not like retailers are trying to be ogres, but it feels like that as a recipient who may have gotten something that's the wrong size, or a color you don't wear, or something you don't want.
2:51 Speaker 03 But retailers are just getting eaten up by the cost of returns. And this is a stunner. A lot of returns cost retailers more to process than what the item costs to buy originally. That says something about efficiency, right? But what's happening is when you're buying something for yourself or a gift for someone else, know that more and more physical retailers, online retailers, have made the returns very difficult and unfriendly with fees that you have to pay and short return windows.
3:31 Speaker 03 And stores that have both physical locations and dot coms are more and more, and it's becoming common, if you go to return an item the way you received it, if you ordered from dot com and you want to send it back, UPS, FedEx, or whatever, and you're used to being able to return it for free. Now, what retailers are doing, and again, this is not universal, but very common.
4:01 Speaker 03 If you want to send it back through a carrier, you have to pay a fee to send it back. If you go to the store and return it in person, usually you'll avoid the fee. But you just got to know, and especially when you're gift giving, unless you absolutely know that what you're buying is something the recipient will love and use. You need to know what are the rules for returns? Because the era of simple, easy returns is over. Now Costco, by comparison, other than earlier this month, gosh, going to Costco and seeing the return lines? Oh, man.
4:46 Speaker 03 Oh, whoa. Costco's always been very accommodating on returns. A lot of things you can bring back, no questions asked, essentially forever. Others, you may have a limit of a few months when you can bring them back. But I want to share something. I want to make sure you know about Costco, my favorite store, that they do, that almost nobody knows. So let's say you buy an item in Costco and you're back there and you're like, oh, man, I can't believe it. I bought that for $30 more than it's priced now.
5:30 Speaker 03 Well, if you notice a price cut within 30 days of when you buy the item, you can go to the membership desk and Costco refunds that difference. And if you don't have your receipt, don't worry because, you know, they know on your app, you've got the receipt or they can pull it up on the computer. They see what you paid. They credit you back the difference. All you have to do is ask. But then news of the weird. My wife bought one of these crazy, fancy, expensive Dyson hair drying styling thingies.
6:11 Speaker 04 The air wrap.
6:12 Speaker 03 Thank you.
6:12 Speaker 04 Mm hmm.
6:13 Speaker 03 She bought it and then out of the blue, we got this in mail and it's a standard thing. Didn't just come for her. Says Costco's dedicated to bringing you the best products at the lowest possible prices. Our records indicate you recently purchased item number 1847868, the Dyson air wrap. We've since negotiated a better price and are passing the savings to you. Please accept this shop card valued at $20 per unit purchased. Thank you for your continued membership. And there was her $20 shop card. I mean, imagine the members getting these in the mail and it's like, who does that?
6:57 Speaker 04 Mm hmm.
6:58 Speaker 03 Who does that? You ever heard of that anywhere?
7:00 Speaker 04 No. That's why you had a dog named Costco and now you have one named Kirkland Signature.
7:05 Speaker 03 Signature, well, because Kirkland Signature is like the world's greatest brand. All right. Do you think we got so many questions posted for the podcast and YouTube show about Costco? Because people know how much I love it? Or do you think it's because Costco is just so much in the air now?
7:23 Speaker 04 I think it's definitely because people know you love it and maybe you've gotten them interested in it. Your enthusiasm for it is infectious. I think the same is true for travel. I don't think we get the number, we wouldn't get the number of travel questions we get.
7:35 Speaker 03 Okay.
7:35 Speaker 04 If you weren't, you know, so into travel. So, well, Sean in New York wrote in with this related question. I saw at least a dozen people in line at Costco returning their Christmas trees. This is unhinged. What are your thoughts on balancing customer service and abusive customers?
7:53 Speaker 03 So, this is something that's been stuck in my craw, whatever my craw is.
7:58 Speaker 04 I know. What is that?
7:59 Speaker 03 For a long time was one day.
8:03 Speaker 03 Walking into Costco and a guy's there with one of the orange rolling flats and he had four old computers on it. And I said, what's going on here? He said, oh, well, Costco takes anything back and the new computers are better and cheaper. So I'm just bringing back the old ones. This was goes all the way back to before Costco had to change.
8:29 Speaker 04 Yeah.
8:30 Speaker 03 In line with what Sean said, they changed it to 90 days return. This guy brought computers that were years old back and thought it was just fine to get a refund for those four and then go buy other ones. And so, yeah, that is a problem is there are people that will abuse. But let me tell you the thing that really gets me upset at Costco, Sam's Club and BJ's Wholesale, all membership warehouse clubs. We're all paying fees if we're a member of any of these to be a member. Somebody picked something up, they put it in their cart, then later they decide, oh, I don't want that. And they just lay it anywhere.
9:10 Speaker 04 Oh, I don't like that at any retailer.
9:13 Speaker 03 And if it's a refrigerated item or a frozen item, that'll be spoiled product. And the warehouse clubs operate on such narrow margins. So it's like I'm the Costco police. I'll see something somewhere where somebody left it out or at Sam's and it's a refrigerator frozen item. I go find, take it and go find an employee so they can, before it spoils, put it back in the refrigerator freezer. Cause I just, I want to have those deals and I don't want costs to creep up and the prices aren't as good.
9:47 Speaker 04 Oh.
9:47 Speaker 03 So.
9:48 Speaker 04 I was just thinking it was something different, but I, I used to.
9:50 Speaker 03 Oh, what? You thought I had something more altruistic than that?
9:53 Speaker 04 No, no. Well, yeah, maybe. I have worked so many retail jobs and I cannot stand like if I see someone, you know, has put, or something's dropped on the floor, an article of clothing, I put it back. Or if I, last night I was shopping and I, I had these two sweaters in my hand. I was going to try them on and then I was like, you know what? I do not need this sweater. It was expensive and I was like, I'm not even going to try it on because I don't need another sweater. And I was way across from where they were. Like it was a long, long walk and I was like near the cash registers. I was like, I could just drop them there. But I, I like my guilt, like I had to go back and put them where they were supposed to be. Cause I was like, what if someone's looking for those sizes and they, you know what I mean? I hate it when you just see stuff dropped all over.
10:37 Speaker 03 Well, see, I look at it this way. I've got to walk so many steps today. I'm getting more steps.
10:42 Speaker 04 That's smart. I did.
10:42 Speaker 03 If I take them back.
10:43 Speaker 04 I did get a very high step count yesterday. So yeah, okay. Anyway, sorry for that.
10:49 Speaker 03 And speaking of the clothing, can you imagine working at one of the warehouse clubs? And you're having to refold the clothes all the time that are laid out on those tables?
10:59 Speaker 04 Listen, I used to work at the Gap.
11:02 Speaker 03 What was it you used to have to say when people walked in the door?
11:04 Speaker 04 It was about the khakis. This is in the 1990s.
11:07 Speaker 03 What'd you have to say?
11:08 Speaker 04 We have flat front pleated, all the different, I'd run through all the different types of khakis we had. But I folded a lot of T-shirts and sweaters and pants because people just toss your stuff everywhere. All right. Well, we're going to stay on the, I know. Well, let me tell you, it's not even.
11:24 Speaker 03 I can talk about retail for the rest of my life.
11:27 Speaker 04 Well, I hate to say this. Anyone who hates this is going to hate the next question too. Because we're staying with it. Russell in Texas says, I'm curious what Clark thinks about home and auto insurance offered through Costco.
11:41 Speaker 03 And then names the company.
11:41 Speaker 03 So we get, we get really no complaints about the auto or homeowner's insurance products available through Costco. And I don't know why that is, but it's not a source of complaints because usually people are complaining to us about every auto insurer and it seems like lots of different homeowners insurers we hear complaints about. For whatever the reason is, we don't hear complaints about the insurance being sold through the Costco services portal.
12:14 Speaker 04 Okay, so we're moving away from warehouse clubs.
12:17 Speaker 03 Sorry.
12:17 Speaker 04 And I'm going to travel. Okay. Tim in Pennsylvania says, "I traveled to the UK for Christmas and because of you, I knew I needed to apply for a UK ETA. When I Googled traveling to the UK from the USA, I found a website and went through the process, paid via credit card, then went to upload my passport and saw that the charge was for over $100. Being a longtime faithful listener, I remember that you said the charge was small and it led me to question the site. I went back again and found multiple sites for the UK ETA processing. I ended up going to the US State Department website and found the right link for a charge of $22. I don't think, or hope anyway, that the other sites are scams, but more predatory sites
12:59 Speaker 04 trying to make a buck off of people traveling to the UK. I called my credit card to contest the charge. I don't remember if you've ever reported on this before, and I wanted to share it with you to be able to share so that it doesn't happen to others. The site I ended up using was gov.uk."
13:16 Speaker 03 Yeah, so this is a big problem in the travel world. People have reported this who are going to Australia, where you have to have an electronic travel authority. Europe's about to start the, I think it's called an ETSA, so I don't know what the S stands for, Electronic Travel Something Authority. And these phony sites pop up, I call them phony, on Google or other search engines, but principally people are at Google searching for these things. And you always want to make sure with any government visa document, or landing authority, or anything like that-
13:58 Speaker 04 Passports.
13:59 Speaker 03 -that you are at the site- That is a government site, like in this case gov.uk.us, it would be .gov. And we had the question recently about renewing pre-check. And that one was really confusing because you go there to renew and then they're sending you saying, pick this private organization, that one or the other one. But that's clear because you're inside of .gov and then they're sending you to an outside servicer. But know that these outside servicers or whatever you call them, I call them phonies because they're misleading you and just ripping you off.
14:40 Speaker 03 And so know that this is a trend around the world, though, that you are going to have to have, even for countries that are visa-free entry for Americans, you are still going to have to have an electronic registration that you pay a fee for. And you can't say, oops, I forgot at the last minute. You need some time to get these, usually a week to two is plenty to get your ETA or whatever they're calling it for each country. This is tied into the fact that countries now, including us, for people coming to the United States, they want to know who's coming, they want to check them out before they can board a plane to come to that country.
15:25 Speaker 03 And if they don't want you, then they're not going to issue your ETA. And when you arrive, they're going to do biometrics on you. They're going to take fingerprints, picture, whatever, or both, and it's all tied into that initial registration you do with the electronic authority that you buy. But remember, buy it from a website of that government. Coming up ahead, speaking of government, the US Congress actually did something to help people. I know bulletin. In the revisions to the ABLE program.
16:07 Speaker 03 And the ABLE program is something that almost nobody knows about and is so helpful to the many, many millions of Americans who have a disability or have family members who have one. And I'm going to explain how this works and how the new benefits can serve you.
16:28 Speaker 00 Life is all about making decisions. Sometimes you make questionable ones. Like buying a new TV that's too big for the wall because the electronics store employee was a little too good at their job. Then, sometimes you make great ones. Like protecting your home and auto with Progressive. You get customized coverage options so you can be sure you have the right coverage. Get your quote today at progressive.com. Progressive Casualty Insurance Company affiliates and other insurers, not available in all states.
16:57 Speaker 01 Your sausage McMuffin with egg didn't change. Your receipt did. The sausage McMuffin with Egg Extra Value Meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
17:09 Speaker 02 Price and participation may vary. Promotion pricing may be lower than meal pricing.
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18:42 Speaker 03 There's something that has been so little known and seldom used, and it's because there's a straitjacket of rules. But it's something known as an ABLE account. For the many, many millions of people who have a child who's disabled, or an adult who's disabled, there's a cousin or a sibling of the 529 college savings accounts. Instead of a 529 for college, it's a 529A, A for ABLE, that allows you to put money aside in a tax-free account for yourself if you're disabled,
19:25 Speaker 03 or a minor who is disabled, and have the money grow tax-free, be used tax-free for eligible expenses deemed as things you can spend the money on tax-free for somebody with a disability. And it does not hurt your eligibility for other government assistance you may be eligible for because of your disability. This is significant because historically, before the 529 ABLE came into existence, a disabled person had to be impoverished in order to qualify for any state or federal assistance
20:10 Speaker 03 they might be eligible for with a disability. With the ABLE account, you are able to accumulate up to $100,000 in it that grows tax-free, spent tax-free, without hurting any eligibility for various benefits from the social security system for disability or anything else that you might be eligible for. And the changes that Congress made are so good. One of them, it now says you don't have to become disabled as a child. You can become disabled at any point up into early, middle age, up to age 46,
20:55 Speaker 03 and be eligible for this. A lot of military veterans may have a disability. An ABLE account would work for any of a number of reasons. An adult might become disabled, could be after an accident, something like that. An injury, being a victim of violence, anything like that that would cause a disability. It would make you eligible for an ABLE account. Now, ABLE accounts are something that you want to buy, just like you would buy a 529 for college. This is a never rule. It's one of my never rules. You never, never, never, not ever buy a 529 plan for a child's college
21:40 Speaker 03 through a commission salesperson. The commission sales plans are terrible, rotten terrible, with high fees and high commissions eroding what you'd be saving for college. The same rule applies for the 529 ABLES, for someone who faces a disability. So you buy the 529 ABLE many times as a direct sibling of the state college plan that you would buy a 529. Most states that offer a 529 for college offer the 529A or ABLE for people with disabilities.
22:22 Speaker 03 And you pay the same administrative costs, pretty much across the board, with the ABLE, which are teensy tiny now. And this is a great way for, let's say, a parent of a disabled child, worried about later in life, maybe a child's going to need help much later in life, and you can stash money over time and get that nest egg there to defray expenses for that child in adulthood, again, up to $100,000. And you've got to make sure you never have more than $100,000 in the account. And it can start small with tiny contributions and build up whatever you want, just like with a 529 for college.
23:09 Speaker 03 A lot of people in the financial community, investment community, don't know anything about these things. And we are updating our guide to ABLES to account for the changes in the law. Because our guide to ABLES is two and a half years old right now on Clark.com. And I'll do a footnote to this later when we've got the revisions done for the ABLE account. But I'm really excited about how these work. And Krista, do we ever get questions about ABLES?
23:46 Speaker 04 We, I actually have one right now for you.
23:49 Speaker 03 Probably because of the publicity about the change in the law.
23:52 Speaker 04 This was written in by anonymous in New York, and they mentioned what you just talked about, and then say, "My question is whether similar to HSA accounts, can you pay for qualified disability expenses, QDEs, out of pocket, keep the receipts, and reimburse yourself from an ABLE account years later, letting the ABLE funds grow tax-free?"
24:13 Speaker 03 Gosh, that's funny. I haven't had that question in like, three years. And I have not found anything that changes what the answer was three years ago. And that is, no. That just like with a 529 for college, you have to file for certain expenses in the year they're incurred. You have to do the same thing with an ABLE. And an ABLE has an even stricter requirement, because a lot of times, you'll be paying for specialized housing costs for someone who's disabled out of a 529 ABLE.
24:53 Speaker 03 And as I interpret the rules, the housing, if it's billed monthly, you have to pay it from the 529 in that month. You can't even later, you know, later that year in another month. So that is still a straitjacket, because what will happen, and you have to keep thorough records of what you've spent the money on in a 529 ABLE, in case you're ever audited. But it is in this straitjacket of tight parameters of when you reimburse or spend from the account. It's got to be current year expenses.
25:33 Speaker 04 Awesome. And also, I wanted to let you know that our Able article that you had looked at, I don't know when, is actually now updated. So, we did update it because we knew you were going to talk about this.
25:43 Speaker 03 Already?
25:44 Speaker 04 Yes. So, alright, I'm gonna go to the next.
25:46 Speaker 03 Wow, so you don't have to wait for that. We already have it.
25:48 Speaker 04 And then Garth in Virginia says, "I was recently booking a trip with American Airlines and received an offer to save $250 on the spot with their credit card. I have great credit and don't really do much with it, so I figured, why not? Well, it came with a miserable $1,500 credit limit, which didn't cover the fare, so I couldn't even use it. Now, I'm stuck with this card. What do I do with it? I have a year before it has a fee. I have to get rid of it somehow by then."
26:13 Speaker 03 Oh, Garth, I'm so sorry. Well, so, this has been happening to so many people in the last year, that people who historically have applied for a card and are used to getting significant credit limit with an approval. The credit card companies, the big banks, are really terrified about delinquencies and defaults right now. And when a card is approved, a lot of times, the credit limit granted with it is much smaller than you're used to. So, with travel, having a $1,500 limit, that makes it hard to use. And I hope
26:53 Speaker 03 that the 250 you talked about, you didn't lose that because you couldn't do it right at that time. Hopefully, in a year, there will be another opportunity for you to use it. So, what would I do? And I don't know the answer to this about American, the Advantage credit cards. But what I would do, if they offer this, because a lot of the airlines do, there's a junior version of the rewards cards that don't have annual fees, so they don't lose your business completely. Or even, the Advantage cards issued, if I remember right, by Citibank. You could see if Citibank can morph you to another credit card product with no annual
27:38 Speaker 03 fee, maybe the double cash, something like that, so that you don't give up having that line of credit that hopefully will be raised over time and close an existing line of credit. But if you've got many other credit cards and you can't figure out something to do and you can't reclaim your 250 bucks, just close the account.
28:02 Speaker 04 Okay, and then Richard in New York says, I know this isn't a big deal, but on a recent round trip to London, the entertainment console was broken on both flights. Given all the extra fees airlines change, am I entitled to get something back since they did not provide all the services promised?
28:17 Speaker 03 You're gonna hate my answer, no. That is not part of the ticket you purchased as a condition of purchasing it, that you're gonna have a good video system on the plane. And depending on the age of the plane, these video screens are broken a lot. I fly quite often, and I'd say probably one in, if I were just not doing it scientifically, I'd say one in four, one in five flights I take, the seat back monitor is broken on the flight. My wife and I are taking a trip soon, and I said, hey, by the way, don't forget, download
29:00 Speaker 03 some stuff because the video system on the plane will likely be broken because that'll be our luck. Ironic that we're talking about the same thing here. So, no, you don't have an expectation that the system is gonna work. And it's just unfortunate, but those are very complicated systems.
29:23 Speaker 03 And they want to keep the planes in the air and they're not going to pull a plane out of service because they have six video monitors that aren't working on a plane. So that's why having the backup always, what I do when I'm taking a long flight is I've always downloaded a couple of movies to my phone so that I can watch something if the wifi is not working or the video entertainment system on the plane at my seat is out. So I wish I had better news for you. If you fly the airline involved a lot, you can file a complaint and they'll give you some token amount of points or miles usually with your
30:07 Speaker 03 complaint. If you, especially if you have status, they might give you somewhere up to 10,000 points for the inconvenience and not having a working video monitor. And I want to thank you so much for joining us on today's podcast. We'll be back at your service on Wednesday. Tomorrow, we have our Ask an Advisor podcast with Wes. And if you're not familiar with that, it's where we target in on, we get so many very specific investment questions. Wes addresses those for you on his podcast. And our websites
30:49 Speaker 03 are here to serve you 24/7, Clark.com and ClarkDeals.com to help you protect your money and to help you save money when you're buying stuff. It's all about the various services we offer specifically to empower you with knowledge you can act on to have more control so you can save more, spend less, and avoid getting ripped off. Have a great afternoon.
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31:52 Speaker 01 Your sausage McMuffin with egg didn't change, your receipt did. The sausage McMuffin with egg extra value meal includes a hash brown and a small coffee for just $5. Only at McDonald's for a limited time.
32:04 Speaker 02 Price and participation may vary. Promotion pricing may be lower than meal pricing.
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