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Costco Executive Membership: Is It Worth It?

Published 7/4/09 (Modified 2/24/14)
By MoneyBlueBook

Editor's Note: Thank you for your interest, these offers expired and are no longer available.

For many years now, I've been a loyal Costco warehouse club member. In my earlier days, I signed up for Costco's entry level Gold Star membership program at what's now $50 a year - applying for the co-branded Costco TrueEarnings® Card from Costco and American Express credit card in the process for the extra 1% cash back rebate on all club purchases. Over the years, there have been a few instances when I seriously considered discontinuing my membership due to lingering complaints and gripes about overcrowding and inadequate parking facilities at my local Costco locations. But ultimately, the accessibility headaches were not significant enough to outweigh my love for the affordability and bulk conveniences of warehouse style shopping. For now at least, I plan to continue paying my annual Costco membership fee.

Despite my occasional self musings of "is Costco membership worth the annual fee?" - overall, I have to say it is. Despite the inevitable problems associated with visiting such a popular and heavily frequented destination for hordes of bargain hunters and bulk shoppers, when you go to Costco you know the product prices will be competitive, the return policies will be ultra-liberal, and the customer service will be top notch. And no, this is not a sales pitch. I've visited other warehouse stores like BJ's Wholesale and Sam's Club - however, none of them can quite measure up to the overall offerings of Costco in my opinion.

Is Costco Executive Membership Worth The Higher Annual Fee?

A few years ago, I finally upgraded my Costco membership level to premium black card status - signing up for the higher priced Costco Executive Membership. Despite the higher annual fee for Executive Membership ($100) versus the cheaper basic Gold Star membership ($50), because of the higher reward features and extra conveniences offered by the higher membership tier, it actually makes more financial sense to go premium. Yes, Executive Membership costs an extra $50 per year, but the program offers a feature not available to ordinary white card members - a coveted 2% cash back reward rate on all Costco purchases. So long as you are able to spend $2,500 or more in a year at Costco stores (or at least $200 or so every month), the premium membership pays for itself in the long run. Spending at least $2,500 per year will net you at least a $50 rebate check that ultimately pays for the additional cost of VIP membership.

Costco Executive Members also receive additional warehouse benefits and greater discounts on Costco services. While all current Costco members already enjoy discounted rates on services for home, automobile, health, and dental insurance, not to mention discounted savings on subsidized credit and identity theft prevention services, Executive Membership provides for even better deals and offers. The more notable perks include lower prices on check printing, extra savings on payroll services and identity protection, exclusive sign up bonuses for money market and online investing accounts, free roadside assistance for vehicles covered through Costco's auto insurance program, and special benefits on travel packages. Here are some of the offer details for Costco Executive Membership participants:

  • Up to 20% off auto and home insurance premiums via Ameriprise,
  • Free roadside assistance for Costco covered vehicles, and home lockout assistance for covered homes,
  • $60 sign up bonus for new Capital One bank accounts, and
  • $60 sign up bonus for new ShareBuilder investment accounts with 25% quarterly rebated savings on qualifying transaction charges.

To figure out if it makes sense for you to upgrade to Executive Member level, ask yourself this question - do you spend more than $200 every month at Costco locations? While college students and single individuals who only occasionally buy bread or milk a few times a year from Costco stores may find it more difficult to hit the $200 monthly spending mark, young couples and families with children who spend extra sums on bulk packages of meat, paper towels, and/or baby products should easily be able to meet that amount with little effort. Additionally, if you are ever in the market to make a big ticket purchase (sofa, notebook computer, or new LCD TV), it might be worth it to upgrade since the Executive Member 2% cash back savings will instantly pay for the additional cost of membership.

Of course, what you really ought to try to do is earn at least $100 a year in rebates (via $5,000 total spending per year, or $417 a month) so that what way, your entire Costco membership can be obtained for free, rather than just a reimbursement of the additional Executive Membership portion. With the 2% rebate rate that the Executive Member program offers, this feat is definitely more accomplish-able, especially for heavy spenders.

Costco Executive Membership's Refund Policy Is Satisfaction Guaranteed

If you're still on the fence and wary of forking over the additional $50 fee for the higher membership level, Costco's stated 100% satisfaction guaranteed and refund policy should easily sway you. The company explicitly indicates on its website and at its stores that they will refund your membership fee in full at any time if you are dissatisfied with your experience or results.

For example, let's say that after you upgrade to Executive Membership, you discover that you shop at Costco less than you initially thought, and ultimately fail to meet the break even threshold of $2,500 a year (the point at which the 2% cash back Executive level rebates pay for the extra cost of membership itself). Hypothetically, let's assume you only spent about $1,500 at Costco for that first year and racked up only $30 in Costco purchase rebates. By walking up to the customer service desk and demanding satisfaction due to the fact you weren't able to profit from the Executive Membership, Costco will refund you back the difference of $20. While this refund policy is not expressly stated in such terms anywhere on the website or at Costco stores, this policy has been confirmed and verified as official and pursuant to the company's satisfaction guaranteed policy for premium membership. Frankly, I can't think of any real reason not to upgrade to the Executive Membership, other than your preference to reap some minimal interest income from the $50 you might earn if the funds were kept in a high yield savings account or CD deposit.

Ultimately, Executive Membership is a win-win proposition for both you the customer and Costco. You get the benefit of a risk free cash back rebate program and Costco acquires a new customer who's eager to potentially spend more to take full advantage of the higher 2% reward rate on every dollar spent at Costco warehouse locations.

Even Without The Executive Membership Upgrade, Current Costco Members Can Still Earn 1% Cash Back On All Costco Purchases

Regardless of whether you are an Executive Member or not, if you are an existing Costco member or even a first timer who is contemplating signing up for basic Costco membership, you are eligible to earn 3% for annual gasoline purchase of up to $4,000 (1% thereafter) on already heavily discounted Costco gas and 1% cash back on all of your other Costco purchases with the TrueEarnings® Card from Costco and American Express. Once properly linked to your Costco account, your American Express True Earnings credit card serves as your 2 in 1 membership card - with your account information and photo displayed on the back of the card for your convenience. The co-branded Costco Amex card waives the annual fee with a paid Costco membership. Terms and restrictions apply.

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47 Responses to “Costco Executive Membership | Costco Membership Fee | Money Blue Book” 

  1. Pat says:

    Thank you KarmicKreator! This is a win win situation for me :-)

  2. KarmicKreator says:

    As it is a win/win for most, Pat. Glad to help.

  3. Phil Bertelsen says:

    The people they send through the checkout lines to solicit this Executive card are often a pain in my backside. They scan your card with a portable scanner, announce to everyone around you how much you spent at Costco last year and then explain (more or less) how foolish you would be for not signing up. "No thank you." ... "But don't you realize how much you would be saving?" ... "No thank you." ... "It would pay for itself and if you don't like it, you can request a refund." ... "No thank you." ... I've found, unless I get rude and explain why I don't want it, they will not leave. All of the discounts, credits and benefits come in mailers & coupons which I never would use... and the $2700 television I bought a few months back could've been why my past years purchases appear high.. Should I have to explain this in the presence of my fellow shoppers?

  4. WinstonR says:

    I'm not clear on the 2% Executive Membership rewards program. I purchased $30,000 in cabinets from a Costco vender. I also purchsed food, gifts and household items during year for approximately $6,000 and I received a rewards check for $229.00?

  5. karmickreator says:

    To phil:
    I do understand where you are coming from, and the "exec floaters" should be showing their ability to be discreet while talking to you about your membership and your personal shopping history. For that I'm sorry.

    But I was just wondering about your statement: "All of the discounts, credits and benefits come in mailers & coupons which I never would use..." I'm curious to know how you know you need to renew? Most members receive the statement letting them know their membership will be expiring soon. If you too use this as a early notice, then you should know the exec check is attached to that. The check is not a coupon or a mailer at all.

    And, quite respectfully, they are doing their job making sure you know about all membership options... as it does seem that maybe before you bought your $2700 big screen tv you were not aware of the options... otherwise I would guess you would have upgraded at least for that year to make money, since you are not obligated to renew at that level.

    It is kinda a "no brainer" on large purchases. At least this way, next time you go buy something big, they have planted the seed and you would be more willing to upgrade since you would be more apt to make money... and if it doesnt work you get your money back.

  6. KD says:

    I keep my membership primarily for the propane, it's cheaper there than anyplace else. I grill year-round, even if I have to shovel off the deck first. :)

  7. Karmickreator says:

    To WinstonR:

    Not sure about your specific situation, but I think you should have got credit for that purchase.

    At my location, the outside vendor goes to your home, takes measurements and writes up an invoice. You then pay them according to the invoice. That rep later comes into costco with your payment and the invoice gets rang up on our registers. As long as you are an exec on the day of, or before the purchase was made the credit gets applied to your exec check.

    However, if you paid the vendor directly and they didnt need your membership number to write up the invoice then you wouldnt have got credit. I believe some vendors do the sales through their systems and others do it through ours. Some of the vendors who dont use our stystem do offer promos like a $500 cash card for purchases over a certain dollar amount spent witrh them.

    Nevertheless, you should dig out your invoice and see if it has your member number on it. Take all info down to your membership desk and find out how the purchase was rung up. If your member number was used and the credit was not applied the folks at the membership desk can send a request to corporate to have it applied.

    Sorry this doesnt exactly answer your question, but it should get you started to find the answer.

  8. Sofaking Nuts says:

    karmickreator,
    I'm an executive member and just received my reward certificate for about $25. I realize this in only for 9 months. When/will I receive the reward for the final 3 months?

  9. karmickreator says:

    To sofaking nuts:
    Your 2 months after the check is issued begins to accrue towards next years check. Also keep in mind the amount you paid for the upgrade (pro rated amount or full $50?) and any services you used in order to really understand if the executive membership really benefitted you... as every family and situation is different.

  10. Amanda says:

    I used to have Costco's basic membership but I guess I was spending too much because they automatically upgraded me to executive. If you get gas there, buy tires, and stock up on food, I'd say it's worth it for the $100. I do a lot of online shopping, too.

  11. Kb says:

    Can I give my Costco reward certificate to a friend to use it?

  12. John Frykman says:

    No. It must be redeemed at a Costco store for cash. Of course, you can immediately convert it to a Costco cash card which can be used anywhere in the store--gas, pharmacy, liquor store, etc., and then give the card to the friend. Or you can give them more or less money on the card than the rewards check.

    They do not need a membership to redeem the cash card for merchandise or cash.

  13. Karmickreator says:

    To kb
    John is incorrect as long as ur friend is already a member. However he is correct if ur friend is NOT a member. The exec checks are not linked to a membership. So this means if you lost ur check someone else could use it... Or if u prefer to give it to a friend you can... Provided they are a member

  14. Cramebame says:

    Also, as mentioned before dont forget about there other savings via Costco Travel, Auto Program, Auto/Home insurance, and many other various programs you can save so much money on these its a no brainer to stay a executive. Saving 1700-2200 on a car or truck, or 40-50 a month on car insurance pays for your 1 time a year fee even befor you get your check. Just ask the marketers at costco they can help you out.

  15. Melanie says:

    I agree with Harvey and Phil. The aggressive sales pitch at the checkout crossed the line into harassment long ago for me. I have asked repeatedly (>30 times) to not be asked again about this program, but my requests are ignored. When they start the pitch, I reply: "yes I know - I give you $50 now and then you give me my $50 back a year later; sorry not interested" but they continue to harass me about it. I have a great local grocery store that I also use and spend less than $2500/year at Costco. The rebate program is not worth it for me, but they keep asking. WTF. My Gold membership pays for itself based on the supplies I buy there. However, the stress of shopping at Costco is getting out of hand. I am quite sure that I will continue to be harassed while I am held captive at the register and I am on the verge canceling my membership over this issue.

  16. Karmickreator says:

    To Harvey calypso
    First off, I apologize for my peers lack of discretion and privacy in your situation. As far as the public shaming comment made, please understand that this is not an intentional act and is most likely a result of a lack of proper training of these employees. You make some very valid points and I would suggest speaking with a front end manager in the warehouse you experienced this.

    On a separate note sir, Your math seems a bit off to me. You said: "my net credit is really $80-$50=$30. $30 is .75% of $4000. ". You have failed to deduct the 2500 in purchases it took you to earn the $50 you also deducted. Algebra tells us we must deduct from both sides of the equation. In this case you omitted that. So your net $30 is profit was based on 2% of $1500 (your puchases that exceeded the $2500 break even point).

    Mr calypso, we are a company whos primary goal is to take care of our members. If we can do this by not only saving them money on prices but also give them money back for their membership fees wouldn't you be even happier and most likely shop even more? This is the reason for a rewards based membership like our executive level. If you change your mind and want to give it a shot it's always available to you and is always risk free

  17. Bill says:

    Anyone out there correct me if I'm wrong, but by my calculations, it seems the break even point for executive members who also have the Costco Amex card moves up from $2500 in purchases/year to $5000. Without the Amex card, you get back your executive membership fee($50) with $2500 in purchases, but considering you get 1% back with the Amex (with no fee), you get an additional $25 back at that spending level. So, with using the Amex card, you must spend at least $5000 to get $50 from Costco ($100 cash back minus the $50 for the executive membership fee), and to get $50 from Amex, which will cover the membership fee.

  18. TampaMom says:

    Remember the Executive Reward, is completely seperate from the AMEX rebate. We just got $700 back from Costco AMEX in the form of a rebate check which we cashed at Costco, and then today got notice that we will receive $73 from Costco for our Executive Award. Had we not been Executive members, we still would have gotten the $700 AMEX cash back rebate, we just wouldn't have gotten an Executive Reward. A regular membership offers no reward. So as long as your reward from Costco's Executive Membership is greater than the cost of the upgrade, it is worth it.

  19. Phet says:

    I have a question..... My ex husband and I joint executive before we separated. We stayed joint afterward and I went on to get car insurance with Ameriprise for myself. Two years later I decided to get my own executive acct. In less then six months I called Ameriprise and told them that I now have my own executive acct and asked them to link my insurance policy to my Costco acct. A year later I see that my insurance policy still has our old Costco acct on it. So in a case like this, which acct has been earning the rebate if there is any from having a policy with Ameriprise?

  20. chunk says:

    so, if i sign up for both executive membership (2% back) and the costco AMEX (1% back), i would actually get 3% back? $5K annually in purchases would net me $100 from executive membership and $50 from the AMEX?

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