Animal welfare In 2010,
Mercy for Animals conducted an undercover investigation at Buckeye Veal Farm, a
veal supplier to Costco. Immediately following the investigative release, Costco adopted a policy against purchasing veal from producers that use the crate-and-chain production method. The case prompted Ohio lawmakers to vote in favor of a veal crate phase-out in the state. In 2012, Mercy for Animals conducted another undercover investigation of a pork supplier to major retailers such as Costco,
Walmart,
Safeway,
Kroger, and
Kmart. Before the public release of the investigation, Costco announced it would begin requiring its pork suppliers to phase out
gestation crates. In 2015, the
Humane Society of the United States conducted an undercover investigation at a Costco egg supplier. An undercover worker at
Hillandale Farms, a major egg supplier to Costco, filmed conditions in which egg-laying hens lived in
tiny wire cages. Following the investigations, several celebrities including
Brad Pitt and
Ryan Gosling publicly wrote to Costco to address this issue. In December 2015, following efforts by animal protection nonprofits including
The Humane League, Costco released an updated commitment to source exclusively cage-free eggs in its operations. In 2016, the
animal rights group
Direct Action Everywhere (DxE) reported cannibalism and high mortality at a cage-free Costco egg supplier. Costco denied the allegations, but the video sparked a discussion about
animal welfare problems continuing to exist at cage-free egg farms. In October 2020, Costco dropped Chaokoh
coconut milk over allegations of
forced monkey labor.
PETA accused the manufacturer, Theppadungporn Coconut Co., of using forced monkey labor, finding cruelty to monkeys at its farms and facilities. Ken Kimble, Costco's Vice President of Corporate Food and Sundries, condemned the use of monkey labor and stated that Costco launched an investigation regarding the issue and ceased purchasing from the Chaokoh supplier. Kimble also stated that Costco will continue to monitor the implementation of the harvest policies and once satisfied, will resume purchasing. In December 2020, Costco announced plans to end the use of
battery cage eggs across its worldwide operations, becoming the first US retailer to issue a global policy on the confinement of animals in its supply chain. Josh Dahmen, Costco financial planning and investor relations director, stated: "We are in the process of making that transition to cage-free eggs. We will continue to increase the percentage over time, with a goal of eventually getting to 100%." In February 2021, an undercover investigation by
Mercy for Animals showed chickens at a Costco facility in
Nebraska unable to move, sitting in feces, and covered with
chemical burns.
New York Times opinion columnist
Nicholas Kristof covered the investigation, accusing Costco of keeping prices low "in part by developing chickens that effectively are bred to suffer." In June 2022, two Costco shareholders represented by the
animal rights organization
Legal Impact for Chickens sued Costco executives for breach of
fiduciary duty. The lawsuit claimed that the company's use of fast-growing breeds violates
animal welfare laws in
Nebraska and
Iowa, undermining Costco's appeal to consumers. In July 2023, Legal Impact for Chickens filed a formal demand to Costco's board, however, the committee recommended that the board reject the demand. In 2014, the
US Department of Justice and the
United States Environmental Protection Agency alleged that Costco had failed to promptly repair leaks of the refrigerant
chlorodifluoromethane from its refrigeration equipment at its stores. Costco paid a fine of and agreed to spend $2 million over three years to fix refrigerant leaks and make improvements at 274 stores. Costco was criticized in 2019 by the
Natural Resources Defense Council (NRDC) and
SumOfUs for using virgin Canadian
boreal forest to make its toilet paper. NRDC stated that over the previous twenty years, 28 million acres of Canadian boreal forest had been cut down to make toilet paper. In August 2023, the
Environment Agency of Iceland fined Costco
ISK 20 million for a diesel spill originating from a gas station in
Garðabær, which contaminated the
Hafnarfjörður sewage system. In May 2025, the
United States Environmental Protection Agency fined Costco US$3,066,724 over the alleged distribution of unregistered pesticides and misbranded pesticide devices.
Labor standards In 2014,
The Guardian reported that Costco was a client of
Charoen Pokphand Foods. Over six months,
The Guardian traced down a supply chain from slave ships in Asian waters to leading producers and retailers. Costco has published a statement stating that it has had a supplier code of conduct since 1999 which does not allow this practice, and that independent auditors check for violations regularly. In June 2023, a Costco employee in
South Korea died of heatstroke while organizing shopping carts outside. South Korean government guidelines state that outdoor workers be given a 10- to 15-minute break every hour during heatwave advisories; however, these guidelines were not strictly followed or enforced at the employee's workplace. He was given 15-minute breaks every 3 hours without a regular supply of drinking water. The company was later fined ₩30 million by the
Ministry of Employment and Labor. In November 2025,
California fined Costco and its delivery contractors US$868,128 for labor violations involving the
misclassification of delivery drivers as independent contractors.
Pharmacies In September 2016, Costco self-disclosed conduct to the
Office of Inspector General after its pharmacy in
Waltham, Massachusetts improperly altered prescription drug claims to
Medicare Part D and the Massachusetts Medicaid program that resulted in higher reimbursement than was appropriate. They paid a fine of US$340,157.25. In January 2017, Costco was brought to court in the US for lax pharmacy controls in violation of the
Controlled Substances Act. Allegations such as Costco "filling prescriptions that were incomplete", or were for substances "beyond various doctors' scope of practice". The case was settled after Costco paid . In 2019, the
Ontario Ministry of Health fined Costco $CA7.2 million after it found that Costco pharmacies were accepting advertising services from a generic drug manufacturer in Ontario, where it is illegal for a pharmacy to accept rebates, or kickbacks, from a generic drug manufacturer in exchange for promising to stock its brand of drugs. Two Costco pharmacy directors were referred to the
Ontario College of Pharmacists and were fined for the misconduct.
Product quality In July 2015, the
US Consumer Product Safety Commission recalled the EKO Sensible Eco Living Trash Can that Costco was selling because the black plastic protective collar in the opening on the back of the trash can could be dislodged, exposing a sharp edge. Costco was fined US$3.85 million for failing to notify the commission of the defect, despite receiving 92 complaints about the trash can, including 60 from people who sustained injuries. In 2017, Costco and Acushnet Holdings sued each other over their golf balls. In 2018, Costco and Acushnet reached a settlement out of court. In August 2017, a federal judge ordered a "deceptive" Costco to pay
Tiffany & Co. US$19.4million for misleading consumers into thinking they could buy legitimate Tiffany merchandise at warehouse club prices. The decision was vacated in the appeals court which noted that Tiffany did not prove that customers were actually misled, and the case was later settled out of court. In September 2020,
CBS News reported that Costco had stopped selling
Palmetto Cheese after the owner of the
pimento cheese brand called
Black Lives Matter a "terror organization". Costco posted a note on the item at its Myrtle Beach location indicating it will not be reordered, and over 120 Costco locations across the US will no longer carry it. In 2023, the
Kaohsiung Department of Health fined Costco numerous times for selling bags of mixed berries imported into Taiwan that tested positive for
Hepatitis A. Costco was fined NT12.5 million and temporarily barred from selling mixed berries in the country. In July 2023, Costco Australia paid $33,000 in penalties for mislabeling the origin of lobster products. Lobsters imported from Canada were labeled as "Kirkland Signature PREVIOUSLY FROZEN WHOLE COOKED WA LOBSTER" and "Australian Lobster"
. ==See also==