My thoughts on the Costco/Citi Visa Fiasco

If you transitioned recently from a Costco Amex card to a Citi Costco Anywhere Visa card to  make purchases this week at Costco, you may have had a less than optimal experience. According to the  New York Times,  Bloomberg, and countless other websites, lots of Costco shoppers who made the switch from the Costco Amex to Costco Citi Visa got declines, multiple cards sent in the mail, cards sent in error, double-billed by both Amex AND Citi, and simply could not pay for their items: a death sentence for issuers and merchants especially with regards to customer experience, which Costco is so widely known for. Citi reportedly got 1 million+ customer service interactions yesterday, all regarding the Costco switch stopping them from making their intended purchases in some way. Terrible for Citi as most of the sentiment went towards them.

I guess with a Golden State Warriors loss in the playoffs, Brexit, and Donald Trump on the cusp of winning presidency, nothing is really surprising these days. Citi customer experience is no exception. When you switch from a brand that is KNOWN for excellent customer service (American Express), and switch to a bank that has been known to have the WORST customer service and customer experience from any big bulge domestic bank in the west, you are bound to get thousands, even millions, of unhappy customers. People are just now waking up to the unbelievable antics of Citibank (read: Shittybank). Lets talk about the weaknesses we have already known and thus could have predicted this outcome:

  • Citi is primarily a Mastercard issuer worldwide and thus places less priority on the processing of Visa transactions from a sheer volume perspective
  • Citi is extremely global and does not have the resources to place good customer service experience and attention on a US co-brand portfolio, even one as lucrative as Costco’s
  • Citi has had the worst legacy IT infrastructure out of any large bank in the US, much less any global player, which has caused them earning the worst scores out of any bank when it has come to customer experience and customer service

I don’t think Visa is anyone to blame here as other Visa credit cards have been working just fine at Costco since the official switchover day (June 20th). In fact, I think Visa was the right choice for Costco, but they should have kept their co-brand card with an issuer like Chase, who excel at customer service, migration plans, and transitions.

Ultimately all will blow over and everything will go the way it should. It’s just unfortunate there have been so many customer complaints–and that no one will care because this is still best for Costco’s bottom line.

As people in the points and miles community have been saying for a long time, “Citi gonna Citi.” You can thank Costco for the terrible idea in the switch.

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