Is a Costco Membership Worth It?

Is a Costco Membership Worth It?

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Unlike Walmart, which is laser-focused on increasing wealth for its shareholders, Costco is more customer-friendly. As this tweet from Dan Price shows, Costco pays its workers higher wages so they don’t have to go on the government dole. At the same time, Costco customers can find outstanding bargains for a wide range of products. This balance of service and price has made the company immensely popular, leading to the inevitable question: Is a Costco membership worth it?

Costco Membership Options

If you are seeking deals on top of Costco’s already attractive prices, the store offers two types of annual memberships for general customers.

Executive Membership 

This is the premium tier Costco membership, costing $120 annually. Executive members gain 2% cash back on most purchases, excluding alcohol. This means that, for the Costco Executive membership to pay for itself, you would have to spend $6,000 per year or $500 per month at your nearest Costco.

In addition to 2% cash back, the Executive membership also offers deals on services you wouldn’t normally expect to find at a warehouse store and exclusive discounts you can’t get otherwise. These include insurance, mortgage programs, roadside assistance, check printing, and even real estate service deals. To stay on top of all the deals, you can have The Costco Connection Magazine sent directly to your mailbox.

As the cover says, the magazine not only alerts you to upcoming deals, it also offers a variety of useful tips to make your life more comfortable and enjoyable.

With all of these perks in mind, is the Costco Executive membership worth it? This depends entirely on whether you can answer yes to most of these questions:

  • Do you have a large family or spend at least $500 per month on groceries and supplies?
  • Do you live near a Costco, avoiding extra fuel costs?
  • Are the exclusive offers good enough to make you cancel your existing services?
  • Do you run a small business that could use Costco’s competitive payroll services and credit card processing fees? 

Any one of these considerations could make up for the $120 annual fee. If not, then it’s time to consider Costco’s Gold Star membership.

Gold Star Membership

Although it is named the Gold Star, this is Costco’s default basic membership, costing $60 annually. For the membership to pay for itself, you only need to spend $250 per month or $3,000 per year. It doesn’t offer a fixed cash back percentage, but it does give you two membership cards. You can give the other to a family member or spouse if they are older than 18.

Costco’s Gold Star membership is great if the Executive membership isn’t quite worth it for you, but you still want to get wholesale prices.

Business Membership 

Priced the same as the Gold Star, this membership is only for licensed business owners, government institutions, and non-profit organizations. Befitting its wide organizational scope, it comes with six cards for $60 each, instead of just two under the Gold Star tier. However, if you plan to resell your purchases, you will have to inform Costco beforehand.

Can You Shop at Costco Without a Membership?

If you don’t want to commit to an annual membership, regardless of tier, you can still take advantage of Costco’s well-oiled ecosystem of discounts—that is, if you plan ahead.

1. Shop with a Friend

Costco is all about buying in bulk—whatever you think you need and then some. This is why you should plan your trips with family or friends. That way, you can save money by sharing the cost of bulk products. If someone only needs one item from a large package, you can split it with the others.

Moreover, even if there aren’t any special deals to be had, the cardholder might still have coupons. In other words, coordinating your Costco shopping once or twice per month with friends should not be a big deal (no pun intended)!

2. Use Costco Shop Cards

Sharing is caring. If you’re lucky enough to have a friend with a Costco membership, don’t be shy about asking them for a Costco Shop Card. Executive members receive one $20 Costco Shop Card per household—no membership needed!

However, keep in mind that these cards are not transferable and cannot be used with other discounts or promotions.

Not a Bulk Shopper?

If you have room in your home for storage, shopping in bulk definitely pays off. It’s not uncommon to be able to buy half a year’s worth of supplies at Costco for dirt cheap. This is especially true for non-perishables—detergent, shampoo, liquid soap, toilet paper, electronics, paper towels, etc.

Jumbo packages of perishable food go a long way if you own a French door refrigerator with an ample freezer compartment. It becomes exceedingly cheap to stock up on things like tasty frozen pizzas, saving you time and energy on preparation and cooking.

But if you don’t have much storage room or a large fridge, it is best to organize your Costco trips with friends to split multi-pack items and therefore the costs.

How Can You Make the Most of Costco?

You can truly find almost any kind of household item at Costco. This extends to electronics as well. If you are hankering for a top-notch 4K TV but the price isn’t right, it won’t take more than a few months to find a good deal at Costco. Pay close attention, especially before the Super Bowl and near holidays.

1. Take Advantage of Other Services

Depending on your local Costco, you might have access to legacy services, including photo centers for custom greeting cards, photo books and covers, and custom canvas prints. Costco’s online services are becoming more prominent, so many of these items can be ordered online and picked up in person. These types of locations also let you refill your printer toner for a price that likely can’t be matched anywhere else.

You can also take advantage of Costco gas stations, which offer gasoline below retail. Costco Optical and Pharmacy are further cost-saving options, with licensed pharmacologists, optometrists, and ophthalmologists.

Members can even order over-the-counter and prescription medications online and have them delivered to their house and get access to free screenings for lung health, heart health, diabetes, and osteoporosis. Free screenings occur throughout the year, but not all locations have all of them yet.

2. Share Costco Memberships 

You can share your Costco membership with a friend. Even the basic Gold Star membership comes with two cards. Although the second card is meant for family members or spouses, there is no verification process.

Furthermore, discount-buying websites like Groupon sometimes offer discount memberships. This is quite rare, but it may pay to check them once in a while if you are still not sure about getting a Costco membership.

3. Avoid Impulse Buying 

These days, every shopping space is designed to entice you into buying more than you planned. There are entire psychology departments dedicated to determining the best store layout, price fonts and colors, smells, music, etc., to spur impulse buying.

The best way to fight back is to make a shopping list ahead of time based on Costco’s website. That way, you’ll make your decisions based only on deals and what you really need. And when you go into the store, stick to the list!

4. Costco Gift Cards and Tickets

One of Costco’s best features is that it always tries to connect its ecosystem to the wider economy. This is why you will often find discounted gift cards for the nation’s top restaurant chains, like Acapulco, Olive Garden, and NutriSystem, or even for car maintenance services, like Jiffy Lube. This is yet another way to benefit from Costco without committing to a membership.

5. Use Costco for Travel Deals

Members can book travel to a variety of coveted, distant locations, as well as luxury cruises and rental cars. This is all offered under the umbrella of Costco Travel. As a result of the pandemic, prices will undoubtedly be lower than usual. Still, make sure to perform your due diligence and shop around first for the best travel deals.

Our Recommendation

When all is said and done, the nature of Costco determines its optimal use. It’s a warehouse store, so shoppers with ample storage space and freezers will benefit the most from its wholesale prices.

Nonetheless, even households with multiple unrelated tenants can team up to share memberships and split Costco’s massive packages. If you happen to need any of Costco’s many auxiliary health or vehicle maintenance services, its membership can easily more than make up for its annual fee.

Lastly, even without the membership, Costco’s gift and shop cards will relieve some burden from any household budget.


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