Is Costco Executive Membership Worth It?
Over a year ago, I asked the question: Is Costco worth the money? In the end, we kept our membership. You know you’re getting a fair price (if not necessarily the best) on great variety of products, the customer service is great, and you gotta love their food court. So after spending another few hundred dollars on food and gifts today, amongst all those banners pronouncing “2% Cash Back for Executive Members“, I started to ponder if I should upgrade my membership level too?
Executive membership costs $100, regular is $50. At 2% back, basic math says you’ll need to spend $2,500 a year to break even. I probably don’t spend that much. Then I remembered a rumor I kept hearing that if you don’t profit with the Executive Membership, Costco will give you back the difference. Say you only get $20 in rebates. Bring in your rewards check at the end of the year and they’ll give you $30. So there is no risk.*
In addition to the membership cost savings, thanks to the commenters below, I am also reminded that there are tons of other discounts offered to Executive members only on things like insurance, small business services, cheaper check printing, real estate services, and more, that don’t end up on your rewards rebates but still save you money. So not only is there no risk, there is much potential upside.
Heck, you may spend more than you think at Costco. I started doing some math on the drive home. I never spend less than $100 per trip at Costco. Since I go at least once a month, that’s about $1,500 right there. In addition, we occasionally buy things for office parties and get reimbursed. That’s another $500-$1,000. If that doesn’t put us over, add in holiday gifts and other big-ticket items, and who knows, you might just spend over $2,500. Think about signing up for before you do all your shopping!
(Technically, there is no risk at all anyways since they have a 100% Satisfaction Guarantee that includes the statement “We will refund your membership fee in full at any time if you are dissatisfied.” But I’m assuming there you’d have to cancel your membership.)
Find more in Frugal Living | 11/25/06, 12:45am | Trackback
November 25th, 2006 at 6:01 am
I don’t know if they have a similar thing as Sam’s Club.
My wife and I purchased a Sam’s Club business membership. Besides allowing you access to the store at special hours, and fax/click & pull shopping, it also came with several other “employee” memebership cards. We gave the cards to her parents and to my parents as gifts.
-Wes
November 25th, 2006 at 9:24 am
There is more to the Executive Membership than just the 2% discount. For example, I get my home and auto insurance through Costco, and with the Executive membership, I get lower rates and they throw in Roadside Assistance for both vehicles. If you use Costco’s check printing or credit card processing services, both of those are significantly cheaper with the Executive Membership as well, but I do not use these services.
November 25th, 2006 at 9:51 am
I believe it is worth the executive, basically because of what you mentioned. If you don’t get at least $50 rebate to make up the difference from standard to executive, you turn in your rebate and go back to standard.
I have never had to do that of course since I always get at least $100 back on the rebate. I do not own a business, just a largish family of 6, get about everything I can at Costco since there is one very close. It adds up. So I get back at least $100 from Costco and another $2-300 from American Express rebate from using their card. Bonus. Remember that gasoline doesn’t count towards the Costco 2%, but does for the 1% AE rebate. Plus if you need prescriptions, that does count towards 2% Costco and 1% AE.
P.S. You had a blurb about the $4 Wal-Mart prescriptions and now I see that Costco has a $10 for #100 tablets/pills/capsules/etc. counter promotion for certain generics. Better than $4 for 30.
November 25th, 2006 at 9:54 am
I couldn’t agree with you more. I held off for many years on the executive membership because I was afraid that I would not make up the extra $50. When I found out that the money was reimbursable, I decided to try it out. Last year I took my reimbursement check (which was less than $50) to customer service, and they paid me the difference in cash. Not a hassle at all. I don’t know if I ever plan on spending much more than $2,500 in a year, BUT, the member services clearly make up the interest on the $50 that I could have invested for a year. Last year I did the $85 ShareBuilder promotion for myself, my wife, and a joint account for a profit of $240 (after subtracting a $5 transaction cost for the first trade.) Anyway, for those that have not made the leap of faith to the executive membership, do it.
November 25th, 2006 at 10:09 am
That’s a great point that all those Executive discounts may not even show up on your rebate check, so why not get those as well? I’ve edited the main post to reflect this.
November 25th, 2006 at 11:42 am
so true with all the above comments. There are many many benefits…the $85 costco executive bonus from sharebuilder more than made up my upgrade for membership, hence you cannot lose.
you can go here for the link if you haven’t taken advantage of this yet..
link
November 25th, 2006 at 11:47 am
BTW Jonathan, thanks for the link…i should also give you credit for giving me the idea of starting my own website as you can tell by the similarity of the name.
November 25th, 2006 at 12:42 pm
It was worth it for me to upgrade last year when i went in to buy a $2300 t.v. Since I’m not a regular shopper (i go maybe once every two months usually spending
November 25th, 2006 at 2:16 pm
I forgot to mention something in my previous reply. The Citi Dividend AMEX card is the best card to use at Costco (Unfortunately this card is no longer available to new folks). I have recently discovered that the 5% cash back on gas applies to Costco purchases. I have double checked this with my last two statements. If only I had realized this earlier!!!
Even though there has been rumor of the 5% cash back getting cut to 2%, I have had no problems these past several months with my 5% cash back with the AMEX version of the card. Perhaps only the Mastercard version of the card was changed?
November 26th, 2006 at 6:15 am
Is the sharebuilder promotion till valid? The link says it expired on 04/24/06.
November 26th, 2006 at 10:42 am
Brian - I have read that if you had the Citi Dividend card for less than 1 year then you will continue getting the 5%. So, on your anniversary it should revert to 2%.
November 26th, 2006 at 8:50 pm
ab - There is always a $55 bonus available through Costco. The $85 bonus for executive members seems to appear about once a year.
Matt - Thanks for the info. I’m crying on the inside.
November 27th, 2006 at 12:46 pm
I’ve never been that big of a fan of Costco compared to some people. I assume if you have a big family and purchase a lot it makes up the difference, but I’ve spent hours online comparing walmart to Costco and more of the time Walmart has been cheaper. You can get your prescriptions at Costco without a membership and most electronics you can find other places cheaper. So the only benefit I see at Costco is if you have a large family buying in bulk.
November 28th, 2006 at 3:50 am
We’ve always been wary of getting a costco card just for the fact that we DO spend more there- buying things that are a great “deal” that we don’t really need. If we ever get a membership in the future, it will have to be used with caution and a clear list before entering the store. Browsing costco is a trap for us, no matter what percent they give back.
December 2nd, 2006 at 3:41 am
I have been a long time business member of Costco and found Costco’s prices for the same items less than Sam’s. I have memberships to both…. I like the business attitude at Costco…which is to always do their best to make every customer issue in favor of the customer…. Some stuff might be less expensive elsewhere, but those items are on sale and the cost and the guarantee of going to a separate place to save a few dollars and the hassle involved makes me wonder why??
When I “know” Costco may cost a little more, but the prices are fair and the service has always been the very best in my “favor”…..
I have recently bought into the “Executive Membership” category and am not sure that I will benefit??? but I decided to try it and maybe I will like it???? Maybe not???
December 3rd, 2006 at 10:54 am
Many people don’t know about Costco’s fantasic, no questions asked, return policy. You can pretty much take anything back without a receipt, after any amount of time (I think computers are the exception). I always buy electronics there, because you’re essentially getting a lifetime warranty. You can even bring back food you didn’t like.
December 3rd, 2006 at 4:59 pm
I switched to Executive about six months ago, when I was approached by a customer service rep who said based on my purchase history, I’d save money. We buy most household goods & food at Costco–good prices, and fewer choices mean I save money. And you can’t beat the return policy!
December 3rd, 2006 at 9:02 pm
[…] Is being an Executive worth it? […]
December 7th, 2006 at 11:03 am
Yes, Costco insurance is great. I spent a bunch of time comparing rates of multiple companies for both auto & home. The best of the bunch was Amica (Clark Howard recommends them too but I found out on my own). However, Amica did not accept my application because we had too many “claims” on our auto policy. Turns out each one of those roadside assitance calls is counted as a claim, just as if I had actually had an accident. Now I am paying the price for having owned an unreliable old car (gotten rid of it since) and for having young kids who enjoyed locking their mom out of the family car while out on an errand. I digress….. Costco’s insurance through Ameriprise accepted my application and the combined rate (including the multi-policy discounts) was not as good as Amica but better than anything else out there. Unfortunately, they will not insure your rental property.
December 10th, 2006 at 9:17 pm
[…] Sharebuilder is Costco’s “Service of the Month” for December, and they are running a promotion offering $90 Costco Cash for Executive Members ($70 for Gold or Business Members). There’s no reason not to go for the $90, since you can’t lose with Executive membership - They’ll pay you back any of the $50 extra you don’t gain in purchases. You do need to open an account and make one stock purchase. […]
January 9th, 2007 at 7:05 am
My expiration date from my first year is tomorrow Jan. 10th. I went in to see what I needed to do to get my 2% rebate. I was told that my rebate was sent with my renewal notice 3 months prior to my expiration, back in Nov. In other words, my last 3 months of purchases aren’t on the rebate check. In the past 3 months, I’ve spent $3500 on a TV and $700 on ipods. The refund for these is in my account history and will be paid NEXT November, ‘07. I will get the check as long as I pay the additional $50 for the executive membership for this year. I hadn’t planned on doing that. So their 2% rebate should read that it’s only good for the first 9 months of the first year. This is very sketchy.
February 25th, 2007 at 7:32 am
We have been Sam’s club members for many years and occasionally Costco members. We are considering Costco membership again but have tipicaly been disappointed in their prices as compared to Sam’s Club. From reading the previous posts it appears that a Costco membership is considerably more expensive than Sam’s. However if we can recover our initial investment of membership it is well worth a try.
March 20th, 2007 at 8:54 pm
Just wondering, maybe someone can help me out. If I’m the secondary on the executive membership for costco, will i recieve a 2% back as well? Or does that all go under the main persons name?
April 20th, 2007 at 4:57 am
The 2% check is delivered to the address on record. The membership is suppose to be for two people over the age of 18 in the same household. You earn 2% back on both cards and if either of you should bring in a guest you earn the rebate back on those purchases also.
May 5th, 2007 at 5:06 am
“if you don?t profit with the Executive Membership, Costco will give you back the difference. Say you only get $20 in rebates. Bring in your rewards check at the end of the year and they?ll give you $30. So there is no risk” -
just to add more info out there, when i tried to do this i was told my account will go back to being regular acct if i opt to get the difference back. in other words this is same as 100% Satisfaction guarantee on the membership fees.
in the above case you’ll get he $30 back and the account will become the regular non-executive membership type.
hope this helps somebody
May 24th, 2007 at 12:09 pm
The Executive Membership is really worth it. If not just for purchases, than for the services. I recently purchased a Honda Rideline through Costco’s auto buying program (the cars parked outside Costco). I did my own shopping and then I decided to try Costco’s program. It was SOOOOO easy and I was in and out. I couldn’t believe it. I saved several hundreds of $$ than I would’ve at another dealer. Executive members get special benefits like a gift certificate for $50 to use at the dealership which will be used when you go in for an oil change or routine service. Even if you’re not an executive member, buying a car through Costco will certainly save you on a purchase. Oh! and the customer service is truly unbeatable. I got a call a few days later to see how my experience was. They asked me specific things to ensure I paid the right price. I thought that was worth $100 for my whole membership cause I kinda made all my money back.
June 23rd, 2007 at 8:17 pm
Hi I need to know the difference between all costco membership I have been debating which one to purchase I have a family of 4 and I hardly go there only to buy pizza….Love the pizza.
September 6th, 2007 at 2:39 pm
I have an Executive Membership ($100) and buy office supplies regularly through Costco. However, I arrived at the Clackamas, Oregon, store to enter at the special hours and was denied for a host of reasons that I didn’t understand: a.) I wasn’t a “vendor” who spent at least $500 per WEEK there; b.) I did not purchase cigarettes in bulk for my business(!); c.) I did not spend at least $10,000 - $100,000 at Costco; and d.) if I was going to buy any grocery items during the special hours, I was not allowed to do so since forklifts were still active on the floor (this was at 9:30 a.m.) I saw people leaving with grocery items (e.g., one bunch of bananas) I was being told that I could not buy grocery items. The explanation was that those orders had been “pre-pulled” for those “vendors.” I spoke with a supervisor and manager who gave me these reasons. I cancellled my membership, and am still totally confused regarding why I could not enter the store one hour earlier than the hours posted at the entrance, despite having an Executive Membership.
September 11th, 2007 at 11:12 am
I love Costco and I just upgraded to the executive level today. I’m wondering if I can combine my 2% back on the executive card with the 1% back on the Costco AMEX. 3% could add up fast.
September 22nd, 2007 at 9:18 am
well to be honest make this straight!
YOU CAN TRY COSTCO OUT FOR 30 DAYs IF YOU DON”T LIKE IT CANCEL IT
October 10th, 2007 at 9:10 am
I’m actually looking into health insurance and debating an upgrade to Executive Membership for the Costco insurance benefit. Does anyone have any info regarding their health and dental benefit?
November 10th, 2007 at 9:55 pm
I have been a Costco member for many years, I never thought about upgrading my membership until an employee aproached me and tolm me about it. It was great because 12 months later, I only had to pay $3.00 for my annual fee membership for the year. Thanks Costco!!!!
December 13th, 2007 at 6:42 pm
Does the 2% cash back for the exec member include online orders?
January 17th, 2008 at 7:43 pm
It is clear that the author of this post works in the marketing department of Costco.
February 12th, 2008 at 4:59 pm
I just got convinced of getting this today. At first I was thinking how this would not be worth it if I don’t spend at least $2,500 a year. Then I started thinking about how much I spend having friends making purchases using my card and my mom also. The person told me I missed out on $56 dollars cash back. So I presume that they calculate all purchases at Costco, even gas?
March 10th, 2008 at 10:51 am
To me, Costco’s touting of their Executive membership is like dealing with a used car dealership or playing three card Monte. Let’s look at the numbers.
If you have a regular membership, the cost is $45, Executive its $100. So if you spend $2500, with a regular membership you get back $25 and your total membership cost is $20 ($45 -$20). With and Executive membership you get back $50 and your total cost is $50 ($100 - $50). Therefore, the Executive membership actually costs you $30 more if you spend $2500 a year.
The actual break-even point is $5500. Regular membership $45 and a 1% return of $55 means you net $10. With and Executive membership, the cost is $100 and with a 2% return on your purchases you would receive a return of $110, which again nets you $10. Other considerations aside, you will be financially better off only if you spend $5500 or more annually, not the $2500 touted by Costco. One of my real concerns here is that Costco dishonestly in representing their Executive membership program.
March 10th, 2008 at 2:35 pm
“If you have a regular membership, the cost is $45, Executive its $100. So if you spend $2500, with a regular membership you get back $25″
Why? I’ve never seen regular members get 1% back.
March 25th, 2008 at 12:51 am
ummmmmm ok……
Jack Isbell should be more concerned with educating himself on a subject before writing something completely ignorant and uninformed that will most likely be lapped up by even more ignorant and uninformed beings………..
The cost of a regular gold star membership is 45-50 dollars (depending on where you live)
You do not earn any rewards with this membership, no rebates, no percentages back…..nothing…….
To upgrade to exec… you pay a 50 dollar upgrade fee…..which then allows you to start earning 2 percent back on your purchases throughout the year……( as well as all the other little benefits and discounted services)
If you do not earn more than 50 dollars back on your rewards check at the end of the year…. you are reimbursed the difference….MEANING….. you get back the money you originally spent to UPGRADE the membership, and it didnt hurt you to try the membership……..
Either way, you still have to pay 50 dollars for the cost of your membership, whether it be a gold star, or an executive…but if you choose to spend an extra 50 bucks so that you can earn rewards, you wont risk anything by doing it, and on the plus side, if you shop there alot, you can actually make money back
I stopped paying for my membership in 2001, and have made over 200 dollars back each year, so after I give back 100 to costco for my membership, I get an extra 100 bucks to put in my pocket
But I LOOOOve costco, which is why I get so much back.
So to be honest, only an uninformed person wouldnt try the executive…..because they think that they might lose money by doing it, which thay wont.
BUT, there is usually always some idiot who spends a grand every month at costco who likes to think he knows better than everyone else and snubs the employee WHO IS TRYING TO DO HIM A FAVOR by telling him to upgrade. That brainiac couldve been getting a free membership and putting money in his pocket, and instead, since he knows better, he doesnt need the exec, and is happy paying 50 bucks every year.
Now of course if you only spend a dollar a month at costco, then yeah, dont upgrade, you definitely wont be making more than 50 bucks back, but then why even shop at costco, if you dont actually use the membership you pay for?
April 23rd, 2008 at 6:20 pm
Costco Lover is right. The 2% rebate is for executive members only. Regular membership doesn’t earn this rebate. Both memberships can still earn the rebate thru American Express (1% to 3%). So if you’re an Executive member, you’ll receive 2 seperated rebate checks, 1 for Exc. member, 1 for AE. If you spend more than $2500 per year in Costco, it’s worth to upgrade it. I’ve been Executive member for 4 years already and my membership rebate checks are always more than $100. It means that I’ve got free membership.
Sean, I don’t care that the author of this post is working for Costco or not. If he can show us a way to save money, we should thank him. Keep in mind that there is no risk to try it out and Costco won’t give any problem if you don’t like their merchandises or services.
May 20th, 2008 at 12:36 pm
The first Costco in my area will be opening up in a week. I received a book of coupons and invitation to join and receive a $10 cash card. Nowhere do they say how much membership is. That is why I found this forum to find out the membership fee. I have heard a lot about Costco online and I have seen them in my travels but have never been inside one. Even the new one is at least 25 miles away. I am a member of both BJ’s and Sam’s Club which are much closer to me than the new Costco. Would it be worth traveling the longer distance to Costco to shop or would BJ’s and Sam’s Club be just as good? I know what the guy meant about how he always spend more than planned. I do the same at BJ’s and Sam’s. Always leave spending much more than I anticipated. Thanks
May 24th, 2008 at 8:45 am
Although all we wanted was the basic membership, but we were pressured into paying an extra $45 for Costco’s Executive membership. We told their rep that our purchases just wouldn’t justify the extra expenditure, but he insisted that we’d get every cent back, if not more. Just got the rebate, a measily $9.47, plus a bill for another next year’s membership. We’re going to try and get our money back, although none of the promises were in writing. Lousy way to treat new customers.
May 26th, 2008 at 10:16 pm
Did people forget about the food demos Costco has?? Yumm. Also, what about the fact that Costco treats their employees really well. They are given really good pay and really good benefits. When a walmart employee has to go to the hospital who pays for it? My taxes?
May 29th, 2008 at 5:11 pm
can someone fill me in a little on the automobile buying program. What makes are available, how it works…? thank you
June 12th, 2008 at 10:14 am
And now the AMEX Costo Cash Rewards card has gone up to 3% back on gas at Costco (and anywhere else gas is sold). That takes off .135 cents when gas is $4.50 per gallon (like now at Costco in Los Angeles). Not bad!
And for the Auto Program, you just call up the Costco customer service, tell them where you are, and they send you to your nearest dealer. Show your Costco card to the friendly car salesman they told you to see, and you get a great deal on a BRAND NEW CAR!
June 15th, 2008 at 11:27 pm
I work at Costco in Portland (#002) and we get the executive membership as a benefit of working there, in fact i spend some of my days going around and trying to show people that with the amount they spend, they should be upgrading just cuz it is a win/win situation. And yeah the amex is even better cuz you get the 1/2/3/3% cash back rewards, so if you have both exec and amex youre earning 3% everytime INSIDE costco and 3% at the pump!
June 17th, 2008 at 9:48 am
Does the 2% rebate on the executive membership count on beer and wine purchases?
July 6th, 2008 at 1:17 pm
Elitism. Plain and simple. Charging $55 to get in is like having a cover charge at the bar. Ensures a certain clientelle and restricts others. Such as those that might only be coming in for some toothpaste, or a watch. Or, worse yet, poor people!
If it were really about the savings, there would be no need for the cover charge. That would just make this financial manipulation for no purpose. I was turned away at the front door from even looking inside the store! I can’t even see what is in the store to see if the cover charge is worth it! Yeah…here you go! Take my $55 for nothing! lol not likely… I have to use it to buy some toothpaste instead.
July 10th, 2008 at 7:44 pm
They will refund your money with no questions asked ! So go and become a member for a year. If you look around and never buy anything other than a 1.50 hotdog and soda and try all of the food demos. On day 364 go back to the membership desk and they will give you 100% of your money back that you paid for that membership. (even if you didn’t buy the hotdog too! ) You pay 55 bucks because you aren’t a customer you are a member that recieves exellent customer service and savings.
July 22nd, 2008 at 8:00 pm
The executive membership at Costco is great! Costco does guarantee your fee you pay to upgrade. If you only get a $20 check, Costco will give you back $30. Best of all, you dont even need to step down to the basic membership. You can put that $50 + another 50 towards your renewal and keep your executive membership for the following year. And, in regards to the “9 month executive” comment. Costco will send you your money you earned, even if you change your membership back to the basic one. They have excellent service and apparently are a great company, or else they would not have great employees!
August 25th, 2008 at 8:12 pm
So can you use the 2% Rebate check towards renewing your membership or is it only good towards purchases?
August 25th, 2008 at 9:12 pm
I’m pretty sure you can even bring the check to the customer service counter and get your rebate as cash.
August 27th, 2008 at 4:04 pm
You can use your rebate to shop, or towards your renewal. They will even cash it out for you. Then, when you get the American Express card also, you get another 1% on everything you buy everywhere not just Costco. Costco even cashes out the American Express rebate checks, no questions asked. The American Express card even gives you 3% on gas everywhere. I thought it was only for Costco gas, but that isnt true. Just as long as the gas isnt a competitor, like Sams, or Vons, then you get 3% everywhere they take American Express!