However, the legality of parts of the retailer's strategy is being called into question.
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One of Costco's greatest perks is under siege (COST)
Costco's strategy of selling designer brands is in danger.
On Monday, a federal judge ruled that Costco owed the jewelry company Tiffany & Co. $19.4 million after the budget retailer sold diamond engagement rings using the Tiffany name.
While Costco had argued that the word was understood as a generic reference to a ring's setting, not the brand itself, a court determined in 2015 that selling items described simply as "Tiffany" infringed on Tiffany's trademark.
This isn't the first time Costco has been accused of falsely marketing designer products.
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In 2013, Michael Kors sued Costco for allegedly advertising the designer's handbags without being authorized to sell them. According to the lawsuit, Costco advertised $99 Michael Kors handbags, but did not actually stock the bags in stores (and was not authorized to do so). The companies settled the case out of court in 2014.
Costco also has a history of selling what Refinery 29 calls "gray market goods" — designer items that were obtained through channels that aren't illegal, but that are unintended by the original makers. Aspirational designer brands like Michael Kors and Ralph Lauren don't want to be linked to Costco, but some of their items end up sold there nonetheless.
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