IN 1983, Costco Membership was born. At this revolutionary store, shoppers can buy large quantities of their favorite items. But is a Costco membership worth the money? Read on to find out.
Disclaimer: REthority is supported by ads and participation in affiliate programs. We may earn a commission when you click our links. The information included in this post is for informational purposes only and should not be taken as legal or financial advice.
Jump to:
- What Is Costco?
- Costco vs Other Wholesale Clubs
- Costco Price Comparison
- Departments and Offerings
- Return Policy
What Is Costco?
The first Costco opened in 1974 as Price Club in a converted airplane hanger in San Diego. It originally served small businesses, but the company realized it could greatly expand its market by opening it to non-business members.
Video Source: Mashed Youtube Channel
If you’re like many Americans moving from the city to the suburbs, your favorite place is Costco. It sounds strange, but after years of shopping only for items you could carry six blocks home, those giant carts open up a new world.
35-packs of Diet Coke, oversized rotisserie chickens, and blooming plants to display in your newfound outdoor space.
While stocking a seemingly limitless supply of Diet Coke sounds great, does a Costco Wholesale membership actually save you money? Read on to find out.
Is Membership Worth the Money?
The short, simplified answer? Yes. The more complex answer? Not always.
Everything isn’t cheaper at Costco, but a lot of things are, so it’s important to be savvy about what you buy.
It’s also difficult to resist overbuying. You don’t want to purchase large quantities of produce, for example, only for it go bad.
I learned this lesson the hard way. I was just really excited about those big carts.
Multiple Departments
Plus, the real value of your Costco membership card is beyond the grocery store. Costco travel, pharmacy, photo, and tires, for example, can help you save money, big time.
With several membership tiers available, certain options are better for your family size and lifestyle.
We’ve broken down all of the warehouse club membership levels, how they can help your family, and what items are cheaper at Costco than your typical grocery store.
Costco Membership Options
There are several membership tiers available at Costco. The benefits for each will depend on how much you shop and utilize Costco’s services.
Additionally, Costco members can apply for the Costco Anywhere Visa Credit Card by Citi.
The card allows members to earn Costco cash rewards anywhere Visa is accepted. You’ll earn:
- 4% at gas stations
- 3% on travel and restaurants
- 2% on any purchases from Costco and Costco.com
- 1% on everything else
You will be offered this application as a new member but can apply at any time thereafter.
We’ve broken down each option, its membership fee, and benefits. Here’s what each Costco Card membership can get you:
Gold Star Membership
Costco Gold Star Executive Membership is the entry-level membership option. It is best for small families who won’t spend a ton at Costco. It includes:
- $60 yearly membership fee
- Free household card
- Valid at all Costcos worldwide
- Access to Costco Wholesale and Costco Services
Business Membership
As its name suggests, the Business Membership is best for business owners who need to buy in bulk. It includes:
- $60 annual membership fee
- Free household card
- Can add affiliate cardholders (for your staff) for $60 each
- Valid at all Costcos
- Able to purchase for reseal (must provide Costco with appropriate resale details)
Executive Membership
The top-tier option, the Executive Membership is great if you plan on shopping a lot at Costco. Because of its cash-back rewards, this membership upgrade will pay for itself if you spend more then $250 per month or $3,000 per year.
It’s also great if you plan on using Costco’s additional services. For example, Executive members who choose Costco’s affiliate Ameriprise Auto & Home Insurance earn additional benefits, like lifetime renewability and roadside assistance.
Costco Executive Membership includes:
- $120 annual fee ($60 membership + $60 upgrade)
- Free household card
- Valid at all Costco locations
- Annual 2% reward on qualified Costco purchases ($1,000 max cash back)
- Additional benefits on Costco Services
- Added rewards on some Costco Travel products
The 2% cash back certificate is perhaps the best way to save money. At the end of the year, all qualifying purchases will accrue 2% cash back, and a reward certificate is mailed to you.
Then, you can apply this to your next Costco purchase. You’d need to spend at least $6,000 per year for the membership and upgrade to pay for itself.
The math on this is easy. 2% of $6,000 is $120, and the membership plus upgrade total $120.
Tip: Check out the Costco Anywhere Visa card. It’s annual fee is equal to your membership, but you’re eligible for 4% at gas stations, 3% at restaurants, travel, and Costco Travel. 2% for Costco purchases and 1% on everything else. With this card, you can maximize your benefits and won’t have to spend anything extra to belong.
Costco Versus Other Wholesale Clubs
When Costco was founded, the warehouse club industry was off to the races. Today, Costco’s biggest competitors are Sam’s Club and BJ’s Wholesale.
We’ve pointed out some of the key differences, in case you have all three options in your area.
The only notable difference between Sam’s Club and Costco is that Costco’s membership fee is $15 more per year. Unlike Sam’s Club and Costco, BJ’s has a self-checkout.
It also does not have a food court. Instead, most BJ’s have Dunkin’ Donuts kiosks. Costs are relatively comparable among the three, but shoppers find BJ’s doesn’t have as large of a grocery selection.
On the other hand, BJ’s aisles are more clearly marked for easy shopping.
Costco Price Comparison
Grocery is one of the most sizable departments at Costco, but is it cheaper than your typical grocery store?
Of course, Costco produce and groceries is sold in bulk, so it’s important to examine the price per unit. Costco typically notes its product prices by the pound or liter.
Costco certainly has some good deals, but not everything at Costco is cheaper than your grocery store.
Costco vs ShopRite
We did a price comparison between household items and produce at a Costco and ShopRite, both in Fairfield County, Connecticut.
In the case of Kirkland Signature products (Costco’s brand), we compared with a similar generic brand.
Of course, prices will vary by your region, store, what’s in season, etc. K-Cups, rotisserie chicken, Tostitos chips, Coke cans, and mayonnaise all offered the greatest savings at Costco.
Meanwhile, things like paper towels and granola bars were more expensive at Costco.
Other Departments at Costco
Along with grocery, Costco’s warehouse also has a ton of other departments and services members can use. You can also shop for appliances, clothing, electronics, televisions, furniture, jewelry, tires, and toys, to name a few.
And on top of items for purchase, Costco has other services like a full pharmacy and auto department. We’ve detailed some of the services available to members, below.
Costco Optical
The optical department carries a wide range of contact lenses and designer frames and sunglasses for a fraction of the cost. Trained opticians are on-staff to help, and Costco accepts most vision insurance plans.
Tire Center
Costco’s Tire Center offers maintenance and tire care including rotation, balancing, inflation checks and flat repairs for the life of a tire purchased at Costco—installed for just $15 per tire.
Plus, tire care includes nitrogen tire inflation and new rubber tire stems. Even better? There are Costco-only deals on a weekly basis.
Pharmacy
The Costco pharmacy allows members to fill new prescriptions and refill prescriptions. You don’t even have to go to the warehouse.
With home delivery, you can fill your prescription online and have it delivered to your door. The pharmacy will even fill pet medications!
Costco Gas
Before or after your Costco run, make sure to fill up on gas. Costo only uses “top tier” gas and is typically priced better than the competition. Additionally, you’ll get 4% cash back with your Costco Visa card.
Costco Travel
Think of Costco travel like a member’s-only Expedia. It offers vacation packages on destinations and cruises with an array of perks like car rental, all-inclusive, and often Costco cash cards.
And unlike Expedia, there are real-life people you can consult with in the store. Among the numerous other benefits are a 2% cash back bonus on qualifying purchases.
Photo Center
You can definitely order prints to the Costco photo center. Plus, you can create personalized gifts like custom decor and photo books.
Choose home delivery or free pickup. As with anything else, photo products come with the Costco satisfaction guarantee.
Costco Return Policy
Costco has one of the most lax return policies out there. You can return practically anything purchased at Costco at any time for a full refund. The only exception are major appliances and electronics, which have a 90-day return policy.
Otherwise, go ahead and bring back those strawberries if they spoil too early. Or that patio set if you decide it doesn’t go with your decor. You can even return your membership itself for a full refund with Costco’s “satisfaction guaranteed” policy.
One woman returned a dead Christmas tree in January. Yep, she got her money back! While we don’t recommend this, it is a testament to Costco’s generous return policy.
Should You Buy a Costco Membership?
Let’s go back to that first question. Should you buy a Costco membership? If you plan to use any of Costco’s services, like optical or travel, you will earn that $60 membership fee back very quickly.
You can also save on an array of household items and groceries by buying larger quantities.
Plus, you can literally cancel your membership for a full refund at any time if you aren’t happy with it or don’t feel you’re getting your money’s worth. So in sum, yes, you should buy a Costco membership!
