CostCo Membership Fee: Worth It?

CostCo Membership Fee: Worth It?

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Costco is one of the only physical retailers I know of that makes you pay for your membership. So, is it worth it to pay the Costco membership fee each year? We think so. We’ll lay out why below.

What Kind Of CostCo Memberships Are There?

There are 4 kind of memberships, 2 for personal and 2 for business use.

Gold Star Membership ($60) – The starter membership, which is perfectly awesome. You get two cards, one for you and a member of your household.

Gold Star Executive Membership ($120) – The Executive membership allows you to get 2 percent cashback at Costco. Doing the math, if you spend more than $3,000 per year at Costco, it would be worth it to get the Executive membership at $120 over the normal Gold Star Membership.

$3,000 a year is only $250 a month — that amount is less than most households spend on groceries per month.

If you’re a family, you might meet this threshold. If you’re single, check your expenses first and see if you’d likely hit that.

If you get the business membership, you get 2 cards as well, but you can get up to 6 additional cards for your employees. However, the 2 percent cashback is limited to $1,000 in cashback. You reach the cashback limit when you spend $50,000 per year.

There’s also another secret. Each Costco membership can be used at any Costco retailer worldwide. Some of the international Costco’s have cheaper memberships but you’ll need to check with the country. I hear Korea has a cheaper one than the US.

How To Save Money On A CostCo Membership

There are a couple of deal sites which offer really good Costco Membership deals occasionally. I’ve seen Groupon offer a free membership by giving you a gift card for the cost of the membership. LivingSocial offers city-specific ones at times. Usually these two sites offer the deals in the middle of the year because they know that’s a time most people usually don’t sign up for yearly memberships.

If you’re willing to wait, they had a deal in May, so you could consider waiting until then.

CostCo Loss Leaders

A loss leader is something a company sells that will result in a loss for them, but will bring in business.

Basically you come in to buy rotisserie chicken, and go out with a shopping cart of your other groceries.

The great part about Costco is that they have a wide variety of loss leaders. Want to make sure your membership is entirely worth it? Go for the loss leaders.

Cakes: Ever have to take anything to a party and either pick up a $30 cake or try to bake one? Yep, it’s painful, either for your wallet or kitchen! Giant cakes at Costco are no more than $10. I can’t even buy the ingredients for that price!

Rotisserie chicken: This isn’t a special loss leader for just Costco, but supermarkets in general use rotisserie chickens as loss leaders. Have you ever noticed how whole chickens cost more than rotiserrie chickens? It’s because stores use those chickens to get you in the store!

Costco Party Platters: Cutting cheese, meat, and making some dip takes time. I just want to be able to walk in and pick up a giant platter for less than $10-$15. Costco makes that possible.

CostCo Food Court: The food court is an amazing deal. The foot-long hotdog for $1.5 and $10 XL pizza hasn’t changed price in decades. While inflation has gone up 2-3 percent every year, the price of the CostCo foodcourt has been steady. Even Papa John’s with its 50 percent off coupons doesn’t even come close.

Costco Gas: Get 10-30 cents off per gallon when you gas up at CostCo. Unfortunately, the lines are always super long, so you’ll have to think if this one is worth it. If the line is short though, definitely do it!

CostCo Tires: You get free tire rotation and free flat tire fixes.

CostCo Movie Tickets: You can get 2 tickets for about 25 percent off. Remember when Moviepass was still in business?

Wine: Last but not least, you save a few bucks on each bottle of CostCo wine. A group of people loved Costco wine so much, they created a wine review blog so you can pick out your favorite wines.

CostCo Discounts, Rebates, And Cashback

Costco guarantees your membership, so if you’re ever unhappy, they refund your entire year’s membership.

Costco offers gift cards up to 20 percent off, but you should know that online gift card resellers such as CardPool, Raise, and GiftCardGranny have even steeper discounts than Costco.

Costco Credit Card

Costco does have its own credit card through Citi, and it offers an extra 2 percent cashback on all Costco purchases with no annual fee. It also offers 4 percent back on gas.

Stack Your Costco Cashback

Though Costco doesn’t accept coupons, there’s another app that will give you cashback when you shop at Costco. Ibotta is a grocery cashback app that gives you cashback by scanning your receipt. You pick your coupons, then scan your receipt and get your cashback. The app is free and here’s $10 to get you started through this link.

How Costco Is So Cheap: The Membership Fee

Costco makes 75 percent of its profit from membership fees. Their whole philosophy is to save you money. Costco charges you a fixed fee with their memberships while keeping margins on items razor thin and operating multiple loss leader sections.

Instead of stocking tens of thousands of products, Costco stocks around 4,000 products on average. In a normal supermarket, you get tons of choices for each kind of item. Have you ever noticed how there’s like 20 kinds of oatmeal at the supermarket but just 1 or 2 at CostCo? Instead of having to stock less popular items, you only need to stock 1 or 2 and every square feet of space can be maximized revenue wise.

Selling in bulk also makes things cheaper for you, the consumer. A lot of the cost of a product goes into packaging and oddly shaped products taking up a lot of space. If you can sell someone a product that is 8 times as big as they’d usually buy, you can save a ton of money that way.

CostCo also saves money by not removing items from pallets themselves and letting you do the work for them. Items are stacked on pallets all the way to to the ceiling. Instead of stocking items in the same exact place each week, you’ll notice they’re arranged in different places in the aisle. That’s to maximize time using the forklift.

Costco also employs fewer salespeople. Sure, that might make it harder to find an item, but wouldn’t you rather save the money?

You also save by them not bagging your items. You take your items out to the car and just put them in the back. They do offer free empty boxes in a corner though. The items are usually too big to put in bags anyway, and the boxes are sturdy enough to carry your stuff to the car.

Shopping At A Socially Responsible Corporation

Did you know Costco starts its employees as well-above minimum wage? You also get a 401k (and a 401k match!), health insurance, and other benefits. While other companies have been trying to get employees under the 30 hour mark to avoid paying for their health insurance, Costco has steadfastly stood by their employees.

Turnover is much lower at Costco than at other retailers.

Costco is known widely in the corporate industry as the most frugal company out there in terms of company expenses. Instead of flying board members to fancy places, they spend on their employees instead.  According to a Bloomberg, it has faux wooden tables in the boardroom.

So, if all these discounts didn’t make it worthwhile to you, consider putting your money towards a retailer that does right by its employees.

Other Costco Departments That Save You Money

CostCo Departments To Save Money: Pharmacy, Baby, Optical, Travel

The Costco pharmacy has some of the biggest discounts on pharmaceuticals around. They offer basically the same prices as Sam’c Club. However, Sam’s Club charges $100 a year for their pharmacy while Costco offers it for free.

CostCo has the cheapest flu shots available out of all the discount retailers.

CostCo Baby:

Did you know that the CostCo baby formula is a private label version of an extremely popular brand? It’s also nearly half off.

Same thing with diapers, wipes, and all of your other baby needs.

If you have a baby, you definitely have to have a Costco membership.

Costco Optical:

If you’ve ever worn glasses, you have to wonder why tiny bits of plastic and a little steel cost $100 just for the frame!

I’m not even talking about the lens here. It’s kind of a ridiculous price to pay for just the frame.

Costco optical has a much better

Costco Travel: Hotels, Rental Cars, and Travel Packages:

Did you know Costco also offers travel packages? Check them out before your next trip.

CostCo Samples

This is probably the thing you hear about most on TV. Everyone talks about those samples at Costco, and yes they are as great as mentioned.

Everytime one goes to CostCo, there are samples in every aisle.

Seriously, skip a meal and just sample all the samples. Costco has done this for decades, so they’re not stopping this anytime soon! If you’re trying to save money though, it’s incredibly easy to be tempted because a lot of the samples are really good. Make up your mind on what you want to buy before you get into the store.

Tips To Make The Most Of Your Costco Shopping Trip

Make a list of the items you need in your shopping trip and make sure you stick to it.

Temptation runs amok at CostCo. 1,000 paperclips for $5?! What a steal, even though I’ll never use them all. 10 pounds of delicious chicken wings for $25? Erm, ok, why not?

Make sure your trunk has plenty of room for the things you buy! It’s much easier to load all your things through the trunk.

If you need bags, you’re going to have to bring them yourself because Costco doesn’t carry bags. They do offer cardboard boxes to fit your stuff into.

Make a stop at the Costco Food Court to get food to take home on the cheap. It’s still delicious though!

Costco Membership Fee Vs. BJ’s Vs. Sam’s Club

Previously, the Costco membership had been $55 for the starter membership and $110 for the executive membership. BJ’s and Sam’s Club had the same prices as Costco, so competition was fierce. Costco raised it’s prices to $60 and $120 for its starter and executive membership, respectively. Both BJ and Sam’s Club also offer 2 percent cashback at its higher tier.

However, the Sam’s Club 2 percent cashback is only if you spend $500 at a time, which is pretty high. It’s better to get 2 percent back always than try to hit $500 in a shopping trip.

How To Skip The Membership Fee

If you’re really trying to hack Costco, you can always tag along with a friend and split the fee with them.

Each household gets an extra CostCo card, so you can split it with a roommate or someone else in your household.

You can also shop whenever you have a Costco cash card, but in order to reload or purchase those from Costco, you’ll need to be a Costco member. However, if you can find a giftcard another way, you don’t have to pay for the membership.


Fearful of going into Costco and don’t want to pay the membership fee? Instacart shops at Costco for you and delivers the food to your home so you don’t have to deal with lines and checking out.

Alcohol Purchases

There are a couple of states in which you can’t be stopped from buying alcohol. For those states, you can just tell the card checker at the front at the front that you want to buy alcohol and you’ll be let in.

Purchase At The Website

While non-members can purchase from the website, there will be a 5 percent fee to do so. If you spend less than $1,200 a year at Costco, it might be worth it to just buy from the website. There’s free shipping if you spend at least $75.

Use A Costco Cash Card

You’ll have to get a member to purchase a Costco Cash card. You can pay for part of the purchase with the Costco Cash card, and the rest on a credit or debit card or cash.

Any other Costco tips? What’s your experience with the giant warehouse store?

Author: Olivia

Olivia worked in finance and wants you to learn the secrets of financial independence. She believes there are so many ways to monetize your life and make money doing the things you're already doing because so many companies offer free money.

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