What must be verified during the auditing of refunds?

During the auditing of refunds, verifying the legitimacy of each refund and the item's condition is essential to ensure that only valid returns are processed and that the return policy is upheld. This involves confirming that the returned item aligns with the original purchase details, such as ensuring that it was indeed sold by Costco and falls under the acceptable return criteria.

Validating the condition of the item also plays a crucial role, as it helps to determine if the item is returnable based on its state—whether it is unopened, used, or defective. This step protects the company from potential fraud and minimizes losses resulting from improper returns. By ensuring that the refund process maintains high standards of integrity and customer compliance with company policies, Costco upholds its commitment to quality service and accountability within its operations.