How Costco Pays You to Be a Member

Shopping at major grocery stores can lead to spending tons of money each week. While it’s easy to spend a lot of money at a membership store like Costco because of the great deals and variety of products offered, you can learn to offset the cost. In fact, there’s a way you can basically earn back your $65 membership fee. With clever money management and planning, Costco pays you to be a member. So, you can feel a little better about splurging on that next shopping trip. 

Can You Really Get Costco to Pay for Your Membership?

Even if you’re an expert at finding awesome clearance deals like we are, it seems almost impossible to get out of the store without dropping at least a Benjamin on their affordable bulk items. According to The Hill, Costco shoppers spend nearly $100-$150 per shopping trip compared to shoppers at Walmart ($54) or Target ($50). If you make the pilgrimage to Costco a couple of times a month, it’s not inconceivable that you’ll spend at least $270 per month. Some families of four easily spend that much per trip.

So why is that $270 number important? As you probably know, Executive Members earn 2% back on almost all Costco purchases* so $270 is the amount you would have to spend per month ($3,240 annually) to earn back the $65 extra you pay to become an Executive Member. If you spend more than that per month for an annual earning of $6,500 (a little over 541 each trip) then you’d earn back $130. This amount covers the full $65 you paid for Executive status and reduces the annual Gold membership fee of $65 to $0, covering “both” memberships.

Most people spend quite a bit on groceries, especially Costco members, so if you go over that $6,000 annually, then the extra rewards are how Costco pays you to be a member. Not the other way around. How cool is that!

Costco Membership Rewards

So you’re probably asking yourself by now, what happens if you don’t spend enough to earn back at least the $65 that you paid to become an Executive Member? Seems like you’d be losing money and it wouldn’t be worth the fee, right?  Not exactly. Costco will refund the difference you paid if you ask them, barring some other contingencies.

You heard us right. A lot of people don’t know that Costco will refund you the difference between the $65 you paid to be an Executive Member and what you earned back in rewards. For example, if you only spent $2,000 during the year and thus earned $40 back, Costco will refund the $20 difference. But remember, you have to ask since they don’t give to you automatically. Simply go to the customer service desk and request the difference. 

Here’s the catch: Costco will only provide the difference if you cancel your membership or downgrade to a Gold Star or Business Membership instead. If you want to keep all of your amazing Executive Membership perks, then this might not be something you want to try. 

Speaking of Executive Membership benefits, Costco members get all sorts of extra perks and special deals not available to regular (Gold/Business) members. For example, you can save extra on dental insurance, check printing, identity theft protection, free roadside assistance, travel, and more. This could add up to hundreds of dollars annually and clearly shows how Costco pays you to be a member in rewards alone

So if you’re not already an Executive Member, what are you waiting for? What’s completely baffling to us is that Costco reports that only 43% of its members are Executive Members. In light of all the above, we feel it should be 100%!  

What’s the Catch?

Obviously, having Costco pay for your membership is an incredible perk, but there is a catch to how much money you can make back. The maximum rebate is $1,250 per year. The rebate check is sent with your annual renewal notice. Interestingly, you don’t have to spend it at Costco and you can request cash instead at any register. Some items are excluded from the rebate as well. 

According to Costco.com, these are items that would not earn rewards in the U.S. (as of 2/6/24):

• Cigarettes/Tobacco-related products
• Gasoline
• Costco Shop Cards
• Postage stamps
• Alcoholic beverages (in some states)
• Food courts
• Membership fees
• Purchases not through Costco
• Online photo center
• My Publisher website
• Miscellaneous fees
• Travel purchases