Costco Membership Cost: Worth It?

Nearly 100 million members pay to shop Costco discounts. Should you join? Read this guide before you start buying in bulk.

Costco © Mike Mozart (CC BY 2.0) via Flickr

For many, flashing a Costco card is a way of life and a badge of honor. Everyone loves the perfectly seasoned $4.99 rotisserie chicken.

And there's no shortage of other fan-favorite deals. Like, the 18-inch food court pizza with everything on it. Or their selection of cheap brand-name booze. Even an 8-foot-tall plush teddy bear.

No doubt, Costco has a cult following. But is shopping at a warehouse worth the membership price? If you're on the fence, here's what you need to know about the annual cost, special perks, and, of course, how to break even.

Membership Cost

Costco currently has 105.5 million members^[1]. By selling memberships, it's able to offer low, wholesale prices while making a profit. Standard membership (Gold Star) starts at $60/year. There are four membership types to choose from:

1. Gold Star: $60 annual fee
   
   • One free household card
     
   • Valid at all Costco locations worldwide

2. Gold Star Executive: $120 annual fee
   
   • One free household card
     
   • Valid at all Costco locations worldwide
     
   • Annual 2% reward on eligible Costco and Costco travel purchases
     
   • Extra benefits on select Costco services

3. Business: $60 annual fee
   
   • One free household card
     
   • Valid at all Costco locations worldwide
     
   • Add additional people to membership ($60 each)
     
   • Purchase for resale

4. Business Executive: $120 annual fee
   
   • One free household card
     
   • Valid at all Costco locations worldwide
     
   • Annual 2% reward on eligible Costco and Costco travel purchases
     
   • Extra benefits on select Costco services
     
   • Add additional people to membership ($60 each)
     
   • Purchase for resale
     
   • Note: The reward is capped at $1,000 for any 12-month period. There's a limit of one Executive Membership per household or business.

You can shop at Costco.com for free, but you'll be hit with a 5% checkout fee. If you don't plan on shopping at Costco more than a couple times a year, it might make more sense to just buy online. It'll add up to less than the yearly cost of a membership.

Another option: Do your bulk buying on Instacart and get it delivered to your home. No Costco membership is required to place an order. But keep in mind that Instacart marks up prices on Costco items by at least 10%.

Pros and Cons of Costco Membership

So, what are the main perks and downsides of a Costco membership? Before signing up, here's what you can expect.

Pros

• Reliable discount prices - Costco keeps prices low (very little to no markup) because most of their revenue comes from membership fees.

• House brand is high quality - Unlike other generic brands, Costco's in-house brand is known for exceptional quality (some even say it's the same top-shelf product in different packaging.)

• Flexible return policy - Costco will accept returns for most items at any time (within reason, of course.)

• Large variety of items - Costco offers a huge selection of different items. Where else can you buy tires, fine jewelry, sneakers, and bulk cereal?

• Concierge included with membership - Costco provides free technical support for any electronic item you bought there and even extends the manufacturer's warranty for 2 years.

• "One-stop-shop" appeal - Need to refill a prescription? Get your eyes checked? Maybe even rent a car? Costco has got you covered. You can fill up your gas tank at a discount, too.

Cons

• Membership fees - Annual budget already tight? Costco's membership fees can add up for those who want to shop without paying.

• Fewer options than a supermarket - If you have a favorite brand, Costco may not stock it. They carry 4,000 SKUs (stock keeping units), while a typical market carries 30,000.

• Costco only takes Visa - If you usually pay with a Mastercard or AmEx, shopping at Costco might not be worth it. (But you can use those cards at Costco.com)

• Buying in bulk can be inconvenient - For individuals or couples, Costco's bulk items are less than ideal. Plus, not everyone has the storage space for extra stuff.

Special Perks

There's more to Costco than just the ability to buy in bulk. Take a look at their other benefits.

1. Tires: Depending on the promotion, Costco sometimes sells certain brands for $70 to $80 off. They also offer a five-year road hazard guarantee and lifetime maintenance (includes inflation pressure checks, tire balancing, tire rotations, and flat repairs).

2. Generous return policy: You have 90 days to return an item, no questions asked.

3. Cheap gas: Costco is listed as a top-tier gasoline retailer. Their gas is usually 20-30 cents cheaper than competitors. Just be prepared to wait in line as this is one of the store's most popular offerings.

4. Costco Travel savings: Members get discounted rental cars, cruises, and guided group trips on domestic and international vacations. Executives get an annual 2% cash back on Costco travel.

5. Discounted movie tickets and gift cards: This deal's availability depends on the store, but you can get discounted movie ticket packs for AMC, Regal, and Cinemark. Sometimes they sell two tickets for $18 - much cheaper than what you'd pay at the theaters.

   You can also save on theme parks, restaurants, gym memberships, and more.

6. Pharmacy services: Anyone can fill a script at the warehouse. You can also get flu shots or ear and eye exams. You need to be a member to purchase glasses or contacts but you don't need to be a member to set an appointment with Costco's in-house optometrist.

7. Costco Concierge services: This program extends the manufacturer's warranty to two years from the date of purchase on select items and provides free technical support for the lifetime of the product.

   So, if your appliance or electronic isn't working out for you, just call their tech-support center for help. A service representative will help you troubleshoot your problem over the phone.

Best Items to Buy

Costco has a treasure trove of warehouse deals. But there are a few standout products that always fly off the shelves.

1. Alcohol: They have an extensive wine and beer selection. Plus, you can buy nearly every spirit under Kirkland Signature: American and French vodka, Scotch, whiskey, bourbon, rum, tequila, and gin.

2. Food court: Grab a quick lunch or convenient dinner at Costco. Who can resist their Polish hot dogs, chicken bakes, churros, and pizza?

   In case you didn't know, Costco is America's 15th biggest pizza retailer^[2]. The price tag for a slice of heaven? $1.99.

3. Athleisure: Costco carries popular sportswear brands like Champion, Fila, Puma, and more for much cheaper than other retailers.

4. Frozen sections: There are about 8 aisles of frozen veggies, fruits, seafood, and desserts. Shoppers swear by the Normandy Blend.

How to Break Even

Buying in bulk can save you a ton of dough. But don't shell out money to join the club just yet. Find out how much you need to buy to offset the annual fee.

To make Costco worth your while…

• You need to spend $3,000/year or $250 per month for the $60/year Gold Star or Business memberships.
  
• You need to spend $6,000/year or $500 per month for the $120/year Gold Star Executive or Business Executive memberships.

Plus, there's no cap on the annual cash-back rewards for the Costco Anywhere Visa Card. So whether it's gas, 30 rolls of toilet paper, or a two-dozen carton of eggs, you'll earn 2% on what you buy. You can also get cash for your rebate instead of store credit.

Is a Costco Membership Worth It?

Costco memberships aren't just for big families who buy in bulk. In fact, there are many ways that a membership can be worth it - even if you're single.

A Costco membership is worth it if:

• You live within 20 minutes of a Costco.
  Even if you go infrequently and buy a handful of essentials (like toilet paper, gas, etc.), the savings on those items will pay for your membership.

• You go through a lot of a particular item.
  Constantly re-stocking items like baby formula, diapers, produce, or eggs and milk? You can cut costs and shop less often with Costco.

• You fill your gas tank multiple times per week.
  Costco gas costs roughly $0.22 cents less per gallon than other gas stations. If you're refilling your tank often, these savings alone are worth it.

• You don't usually have time to cook.
  Costco is infamous for its pizza, rotisserie chickens, and ready-to-eat meals. And it's all pretty good. Even if you live alone, you'll have plenty of leftovers.

A Costco membership is NOT worth it if:

• You live far away from a Costco.
  If you have to carve out a big chunk of your day to make the journey to Costco, the savings may not be worth it.

• You get tired of things quickly or prioritize variety.
  Costco stocks bulk items and fewer SKUs than a typical grocery store. If you don't want to use up a bulk item before trying something new, skip Costco.

• You have a tendency to impulse shop.
  If you can't go shopping without impulse buying a lot of stuff, you'll rack up a large bill. Even worse if you don't have the room to store the bulk items.

How to Maximize Your Costco Membership

If you're paying the membership fee, you want to feel like you're getting your money's worth. Here are a handful of things you can do to get the most out of your Costco membership.

1. Top off your gas tank when you're there. You'll save around 20 cents per gallon by filling up at Costco.
   
2. Go earlier in the week. By going Monday through Wednesday, you'll avoid the crowds that gather on the weekends. It's best to avoid Thursday, too, since that's when Costco drops its deals.
   
3. Always make a shopping list. Sticking to your grocery list will help you steer clear of temptations and impulse buys.
   
4. Avoid perishables. You're less likely to get through bulk produce, meats, and dairy before they spoil. Stick to non-perishable items to ensure nothing goes to waste.
   
5. Make a habit of checking Costco.com first. Costco's website features a ton of deals. Look before you shop to save some extra cash on your next trip.
   
6. Don't assume Costco prices are lowest. In some cases, buying at the regular grocery store or online (i.e., via Amazon) can be cheaper.

What You Can Get at Costco Without a Membership

Not sure you want a Costco membership? Luckily, you can still do the following things without a Costco membership card.

1. Buy anything at Costco.com (non-members simply pay a 5% surcharge)

2. Fill your prescriptions at the Costco Pharmacy

3. Get a vision screening at Costco Optical

4. Book a free hearing test at Costco Hearing Aid Centers

5. Receive a flu shot or vaccination at the Costco Pharmacy

6. Buy Costco gas (with a Costco Shop Card purchased by a member)

7. Buy alcohol, depending on your state
   
   • (AZ, CA, CT, DE, HI, IN, MA, MI, MN, NY, TX, and VT prohibit the sale of alcohol through a membership)

Costco Alternatives: How do they compare?

Costco vs Sam's Club:
Sam's Club membership is $45, while Costco's is $60. However, many people think that Sam's Club sacrifices on quality where Costco doesn't. Overall, they're comparable in price and selection.

The choice between Sam's Club and Costco comes down to location. Sam's Club has more locations in rural areas, while Costco tends to stick to busier locales.

Costco vs Walmart:
Walmart isn't a wholesale warehouse, but their prices are still very competitive. They also offer a huge variety of items just like Costco does - from tires to houseplants to food. However, even with the cost of membership, Costco prices are still slightly lower than Walmart's.

But if you prefer not buying in bulk and need to make more weekly trips to the market, Walmart could be the better choice for you.

Costco vs BJ's Wholesale:
BJ's membership ($55/year) is slightly less than Costco's ($60/year). There are also much fewer BJ's locations than Costco locations. However, BJ's does offer some of the same perks, like an in-store deli, plenty of well-known brands, and a $5 rotisserie chicken.

If you have a BJ's near you and want lower prices than you'd pay at the local supermarket, this wholesale club could be a decent Costco alternative.

Bottom Line

It's much easier to justify the cost when you have a family or share a membership with a friend or significant other.

And if you don't live near one of Costco's 550 U.S. locations, it's definitely not worth it.

But if you're willing to brave their crowded parking lots, you can expect good customer service and high-quality products (without Whole Foods prices) on the other side of the doors.

You might even start telling people "Oh, I got it at Costco."

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