Is the Costco Membership Fee a Bargain or a Scam?

Is the Costco Membership Fee Worth It?

Looking for a conversation starter for your next dinner party or family function?  Just ask everyone what they think of the Costco membership fee and then sit back and enjoy the show!

You might think I’m joking, but I’ve witnessed several arguments (both online and off) about Costco that quickly escalated beyond reason.

It seems half the population loves Costco and the other half despises it.  I’m not sure why people get so worked up when talking about warehouse club stores like Costco, Sam’s Club, and BJ’s but let’s try to figure it out together.

According to the Costco card in my wallet I’ve been a member since 2002.  Some quick math tells me that I’ve dropped over $500 on Costco membership fees since signing up.  The current price is $55 for Gold Star Members but I think it was around $45 when I first became a member.

That’s a lot of money to spend just for the privilege of shopping and spending even more money at the store.  In fact, it sounds a lot like the personal seat licenses (PSLs) many sports teams force their fans to purchase just for the right to buy tickets.
Costco membership fee
Yet I and over 37 million other households happily pay our annual Costco membership fee and continue shopping there, so obviously a good portion of the population feels the value they receive is worth more than the cost of admission.

How Much Does the Costco Membership Fee Cost?

There are three different membership levels…

Gold Star Membership ($55) is the basic household membership which is perfect for the average family to do their shopping.  You get two membership cards so you can keep one for yourself and give the other to your spouse.

Business Membership ($55) allows business owners and managers to purchase products for business, personal, or resale use.  This also comes with two cards so if you own a small business you can keep one card for yourself and let one of your employees use the other.  You also have the option of adding up to six additional cards if you need them.

Executive Membership ($110) is an upgraded version of either the Gold Star or Business membership levels.  It comes with two cards, and you will also earn a 2 percent reward on purchases.  Obviously, you’d have to spend enough money to make your rewards worth the added cost. To be precise, you’d need to spend at least $2,750 ($230 per month) to cover the added cost of executive membership.

That may sound like a lot but as a Costco member with a growing family I don’t think that’s much more than we currently spend.

Executive membership is a really good deal for small business owners who purchase products to resell them.  For example, there’s a hot dog stand not far from my office and the woman who owns it does much of her shopping at Costco.  She can purchase a 32-count package of Coca-Cola soda for just $7.99 (about a quarter a can) and then resell them for a dollar each.

The more you spend the more your two percent rewards will add up, but there is a limit.  The reward is capped at $750 per year.  Another thing to keep in mind is that the reward is in the form of a Costco reward certificate, not cash.  That means it can only be used inside Costco itself.  While that is certainly a great benefit to regular Costco shoppers, a cash reward that can be used anywhere would be more flexible.

Why Does Costco Charge a Membership Fee?

Costco follows a different business model than typical supermarkets and retail outlets.  While other stores earn all their revenue from the spread between their cost of goods sold and their sales, Costco relies on their membership fees to maintain profitability.

Costco’s goal is to provide the lowest price possible for their customers.  That means fewer sales people on the floor and no shopping bags to lug home your stuff.  But it also means prices that are often significantly lower than you’ll find elsewhere.  There are several items (paper plates and cups for parties, Premio sausage links, grated Parmesan cheese, GoGurts) that my family only purchases at Costco because they are so much cheaper than at other stores.

Costco does put their money where their mouth is and they are even willing to drop a product if they can’t provide the best possible price to their customers.  In 2009, they actually pulled Coca-Cola products off the shelves because they felt the wholesale prices were too high.  Within a month Coke was back on the shelves at a new lower price.

“Costco is able to offer lower prices and better values by eliminating virtually all the frills and costs historically associated with conventional wholesalers and retailers, including salespeople, fancy buildings, delivery, billing and accounts receivable. We run a tight operation with extremely low overhead which enables us to pass on dramatic savings to our members.”  -Jim Sinegal, Costco’s Co-Founder and Director

Common Costco Complaints

There are a handful of arguments that Costco haters like to use to criticize the company.  I’ll list some of the common complaints about Costco and my thoughts on each.

  • Membership Fee.  Yes, I wish I didn’t have to pay Costco’s membership fee but when I add up all the money I save throughout the year I still come out way ahead.  How much you save depends on how much you spend.  Large families and small businesses can really take advantage of the low prices, while single shoppers may not see as much benefit.
  • No bags to carry stuff home.  This doesn’t bother me at all.  Many of the packages are too big for bags anyway and it is easy enough to bring along a few reusable bags for the smaller stuff.   Not providing shopping bags helps keep prices down and it is environmentally friendly too.
  • Lack of employees on the floor…good luck finding help if you need it.  If you’re looking for someone to walk around and show you where to find everything, Costco isn’t for you.  But personally I don’t like being bugged every 15 seconds by someone asking if I need help.  I just want to get in, grab what I need, and get the hell out as fast as possible.
  • You’re forced to buy in bulk.  Savvy shoppers know that buying in bulk is usually cheaper than purchasing smaller versions of the same item.  Of course, you won’t save any money if products go bad before you have a chance to use them.  Larger families have an advantage here since they’re more likely to use their entire purchases.  But smaller families and individuals can always shop with a friend or neighbor and then split up the bulk packages at home.
  • Prices are not always better than other stores.  In my experience, the everyday prices at Costco are better than regular prices at other stores.  Of course, there are times when another store could have the same item at a cheaper price.  This is especially true if the item is on sale and you have a coupon.  It’s always good to consider the per unit price when shopping and compare prices before just assuming Costco is cheaper.

What’s your opinion?  Are you a Costco member?  Do you think the Costco membership fee is worth it?

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Mike is a freelance writer and blogger who specializes in finance and parenting topics. He is a dedicated husband and father of three who is obsessed with creating multiple streams of income and building wealth so he can achieve true financial freedom for his family. Like what you're reading? Subscribe to our free RSS feed and follow us on Twitter.

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    • Philip Ceja says

      I know this article could have been summed up a lot easier. All he has to say is go to the cell phone kiosk (wireless advocates) and see that Verizon charges Costco charges $79.99 and they give you a car charger and a navigation mount worth about $30. Verizon charges $249.99 with a $50 mail in rebate. They carry Sprint T Mobile AT&T and Verizon they all come with accessories and some get additional rebates instant or mail in.

  1. Ken says

    Why does a store want me charge me for the pleasure of going to shop there! Doesn’t make sense – plenty of stores that don’t charge me to just walk through their door!

    • says

      Costco’s membership fee helps them keep the prices of their merchandise down. People who shop there a lot get a great deal, while people who only go a few times a year don’t make out so well.

      • Anna Summers says

        Exactly! Charging a fee simply distributes the cost to your customers unfairly and contributes to extra profit for CostCo.

        Lower prices should be provided by all the expenses you don’t have, such as the services and conveniences you don’t offer and the employees you don’t hire (compared to stores that do offer services, help, and convenience to their customers, as well as retail sized packaging, bags, and carry-out.

        Fees just provide higher profits for CostCo on bulk sales.

        The fee is a scam.

    • Tiffany says

      It’s a good thing you actually read through the whole article.. That’s why you must be asking such a question. 😉

    • Anna Summers says

      A large-lot warehouse store selling large quantities with very few salespeople, no bags or bagging-packaging, and no one to carry your items out and load them in your car for you, would be EXPECTED to charge less than a store that was paying for more conveniences for you (buying the quantity you actually need, employing salespeople to help you, providing boxes and bags for your purchases, and employing people to carry them out and load them in your car). They SHOULD charge substantially less for the lack of all these conveniences and their corresponding expense, and should do so WITHOUT charging you a hefty “fee” for the privilege of spending your money with them.

      Not to mention that VERY often their prices are NOT even better than you can find elsewhere, including online, where the merchandise is delivered right to your door, frequently with no shipping charge (Amazon offers FREE shipping on most items if you purchase $35 worth of mdse.) I have had them issue me a refund on small items that I found unsatisfactory, without even asking me to send the items back. Also check out,,, etc. for REAL savings with FREE 2-day shipping right to your door when your order is over $49. Compare their prices to the same items your warehouse “club” sells, with YOU doing all the walking, packaging and hauling.

      Frankly, I find such a fee outrageous and a definite scam. They don’t have the expenses other stores have. All the fee does is spread the COSTS to the customers around unevenly and unfairly among their customers, depending on how much they purchase. It is absolutely a scam! Their prices are no better than they SHOULD be (with NO fee), considering all the expenses they are avoiding. They just figure certain sorts of people will fall for their scam and pony up the money the corp. wants to “join”, just because they want to be able to walk around in the store, like it’s some kind of, well…. “club.” And it is – a club made up of folks who are willing to pay extra for inconvenience.

      Intelligent people (like you and me) learn from their mistakes. Just because you have thrown money at them in the past ( as have I ) is no reason to continue to throw good money after bad. Search online to find the best prices for big ticket items and small-ticket items too, in addition to coupons. I would probably patronize Sam’s or CostCo * IF * they had the best price on something, but only after I had researched to actually FIND OUT who had the best price, BUT NOT if I had to pay a hefty “fee” up front. Especially, since I have often found that they are asking MORE for something I want than I can buy it for elsewhere. It would take an AWFUL LOT of actual, REAL savings to make up their outrageous “fee.”

      • Cynthia says

        In the positives and negatives posted on this page, I don’t see anyone talking about the advantage to buy locally at places that support the neighborhood and people who live in the area (like Costco vs Amazon), or to buy at a store that pays their employees a fair and living wage (Costco vs Walmart). I think there are other reasons to choose where to shop other than where you can save a few pennies, but if that’s part of the deal too, all the better. So yes, if Costco COULD still give us cheap good but their employees are treated like those at Walmart, I wouldn’t shop there for the same reasons I don’t step foot into Walmart.

      • Matthew Cain says

        Costco takes some of the savings they get from the omission of those premium “no value added” services you are used to and pays thier employees a living wage. I for one would love for some of the regular box stores to attempt to pay fair wages with out raising the overall cost of thier products. They couldn’t, or at least, wouldn’t. I am proud that Costco doesn’t use the “work and welfare” model or steal thier employee s wages like Wal-Mart.

  2. says

    We used to have a BJ’s membership. When we moved we were close to Costco so we gave it a try. We like Costco so much better!

    As for the fees it comes down to this – Are you using Costco enough to justify the fee and are you spending wisely? If you don’t shop enough or if you go crazy on items you don’t need then it’s a waste.

    One place you can add the savings on is through their online store. You can find discounts to all sorts of other products. For example we got discounts for Tiny Prints to make cards and I get a nice discount on Quickbooks Online and Payroll through Costco.

    AND their Kirkland products are nice quality too.

    • says

      You’ve got it exactly right Glen. If you don’t buy much or shop there very often the membership fee is a waste. But if you buy enough than you can really come out ahead of the game.

      • Steve says

        It’s really simple. It only costs $4.583 per month. The cost of a 1 gallon of gas per month to save mass money, even if you just bought three items a month it would work out in your favor, in my opinion. As long as Costco keeps the prices as low as possible for it’s members I will be one.

  3. says

    I’ve been a Costco member for almost 10 years. Last year I signed up for the Executive Membership because I’ve been spending $300 to $400 a month at Costco.

    I hate the line-ups but I love the prices. You can’t beat the price per unit on most of the items, and if you’re smart and buy non-perishable stuff, your money can go a long way.

    The quality of most items is top notch. Well worth the membership fee, IMO.

    • says

      Hey Robb, comparing price per unit is key because the sizes are usually different than other stores. But of course it only makes sense if you actually use everything you buy!

  4. says

    I just love the fresh bakery products at our local costco on this side of the pond, not really sure that justifies my membership fee though!

  5. Lyz Boa says

    These “low” prices I see everyone raving about are nonexistent at my local Costco. Four packs of Kirkland bacon go for $14, the same price at any local grocery store where one pack is about $3.50 and all the items are priced so you save oh, maybe 3 pennies or so per item.

    The savings only really add up if you eat like a pig, or have a very large family or a business to run. The fact that the saving is so minimal means there should be no further charge to be able to purchase them, UNLESS you are a business owner and are buying in very large quantities. For the common single child family, though, all I see is a waste. I would not pay $60 if I wasn’t sure I’d save more than my money’s worth in return, and today that means one trip a month wouldn’t be cutting it(but that’s all most people need!).

    Perhaps it was a deal in the past, but now with prices basically matching everywhere else here I just don’t get it. I let my mother keep paying her membership and reimburse her for picking me up a few items here and there because bulk is just nice. Which is why I think they jacked up prices, AND kept their membership fee. Much better profit that way, no?

    • Amy says

      Clearly you live in a very low cost area to begin with because I assure you, the rest of us aren’t paying $3.50 for a decent package of bacon, even on sale.

      It’s sad that your “common single family household” probably eats the common SAD (Standard American Diet) otherwise you’d realize that Costco is a treasure trove of savings in organic foods.

        • None says

          I love it when people say that “packs” of bacon are $x.

          Are you not looking at the weight to compare? The % of water added? Whether water was added? The quality of the brands?

          It’s amazing when people are blind to the fact that, in dealing with processed foods, not all versions are (even remotely) equal in quality / nutritional value.

          • Tommy says

            That was the only intelligent comment in the thread, well done. The cheaper bacon is usually 12 oz not 16. and the percentage of fat that burns off cheap bacon leaves you tiny pieces. Also, the best sales you normally see in a Metropolis are $3.99 a pound, the putz who said he bought 2 pounds for $5 is a liar or he lives in Kentucky, bacon is NEVER $2.50 a pound

    • DF says

      The clothing area alone will save you a load if you purchase there vs the dept stores. I picked up a U of A jacket for less than $30 and if I got it at the college, I’d have paid double or more. Jeans are a steal and if/when things go on sale in the clothing dept, you can get a great bargain!
      Spices are a huge savings for me too. I get my salad there and some fruit. I tried the pollo asodo the other day and it was delish. And I get my bread, sweets and Christmas presents there too! I love the holidays @ Costco! The bakery alone is worth it…unless you want to buy one danish…by all means shop elsewhere. I shop everywhere and get the bargains as I see them.
      You can also ask friends and family (as someone else mentioned) and split the cost and shop together. The member is the only one authorized to shop there but it’s totally worth it, even with the extras the offer-vacations, flooring, and blinds. You can get a great deal if you look and ask…
      I see TVs flying out the door for a huge bargain…70″ smart TV for less than $2k! WOW!

      • cindy says

        I agree, some things are a bargain, like the bigger scale items, but as far as groceries go the prices are pretty comparable to local grocery stores at this time

  6. says

    Hey, Mike, your post just popped up with the Dividend Growth Investor’s carnival.

    Our Costco advantage is twofold: gas & American Express. Our local Costco is Oahu’s largest seller of gasoline, and most of the time their price is lower than the military base gas stations. It’s a fantastic loss leader for Costco, and they actually tore up parking spaces to put in more gas pumps.

    Second is our Amex credit card. I’m much happier using it in Costco (instead of cash, checks, or a debit card) and we spend enough there each year to earn a 2% rebate that exceeds the $55 cost of our gold membership. The gas purchase makes the difference.

    The food court pizza is just bonus…

  7. Ed says

    Glen has it right, you have to determine if the fee is worth the savings. I think we almost hit the savings in lower gas prices alone, if on average gas is $0.07 per gallon less, then using two gallons of gas a day will save me the cost of the membership. While we don’t use that much gas, my wife sure likes to try 😉 Just between gas, milk, and savings on automobile tires, I have saved enough for the next 5 years of membership dues, at which time I will need more tires.

    I find it funny too how people talk about the bulk buying, well yes, you can get miracle whip in 5 gallon containers, but they also have a smaller 1 gallon size that I can use before it goes bad. I get two loaves of bread in a pack vs. one, but I can freeze the second if I can’t use it before it gets moldy, I can easily use the big block of cheese before it goes bad. I can’t find turkey bacon at as good a price even when on sale at the local grocery.

    Guess what? I can get Pepsi cheaper at the local grocery when they run 4-12 packs for $12, so I get it there. It is not hard to know where to get what without much effort.

    BTW, you can request your rewards certificate in cash at the membership desk if you ask.

  8. Kent says

    One other complaint often expressed by myself and others is the inability to use credit cards, unless you sign-up for the AMEX card. I have the executive membership and have had it for 3 years. We got our membership when we bought a small business. We purchase for the small business personal and cleaning supplies and computer paper. Personal items are mainly food with some clothes and household. Overall we usually spend enough to cover the membership fee. Just this past year we got the AMEX card, which aids in cash back with the additional percentages. Last year I did an analysis on milk alone for my family of 3. I saved $23 for the year by buying our milk at Costco over purchasing it at Walmart. We have been very happy with their quality of products offered. Over the counter drugs have also been another area of big savings for my allergy sufferers (2 of 3).

  9. Steven says

    The Costco Executive member 2% reward can be cashed in the same manner as a personal check by cashing the reward check at any check out register. Also by cashing the reward check and taking cash, a Costco member with an AMEX rewards card receives a 1% reward rather than having your reward check applied to your purchases and foregoing the AMEX reward.

  10. Marissa says

    I actually work at Costco and just wanted to point out a slight counterargument to one of the complaints. The reward coupon you receive as an executive member is technically a certificate you redeem for Costco merchandise. However, if your check is more than the total of your order that day, you get the rest in cash. So paying for a $2 gallon of milk with a $300 reward certificate will get you $298 cash in your pocket. And at my store, we’ll happily cash them out for people outright, no purchase necessary. I can’t speak for other stores as it’s probably up to management, but I assume most stores see the logic in that. So the executive check really is as good as cash :)

    • says

      Hi Marissa,

      Thanks for sharing the insider’s scoop! Do you have any other input from an employee’s point of view? Is Costco a good company to work for like everyone says?

      • Dustin says

        Costco is an awesome place to work for! Great pay and benefits plus they take care of you like family.

        • Dirk Shrek says

          Great place to work. Top out at 20+ an hour base pay. Sundays are time and a half. 30+ an hour. Plus there’s 401k, yearly bonuses that start at 5000$ and top at 8000$ granted you have logged 9000 hours. It has since moved up to 13000 hours for new hires 2013 and later.

          Doesn’t matter what you do, pay is the same for the most part. More to cashier, cut meat, supervise, skilled jobs etc. But I could be pushing carts on Sunday and get paid over 30$ an hour to do it. Or watch people pump gas and do nothing for the same wage. I feel so overpaid many days to do mindless work. 😀

          • Dirk Shrek says

            Correction…. Semi-annual bonuses start at 2500$ and go up to 4000$ two times a year after you hit 20 years. Also profit sharing check!

          • chloe says

            That’s not a living wage. That’s closer to a professional wage. I’m in IT and make around that much for NOT doing mindless work. Bye Costco!!

    • Bonny says

      I too work at Costco and I’m the membership manager and your 2% reward can be cashed at any register on the front end in any Costco. Update….. you can now get 2% rewards on pharmacy and tires. As well with the executive card you save alot more on Costco Services ( which you can check online at this includes checks, travel, auto/home Insurance and much more). I work at Costco and have a family of four (2 adults 2 small children) and we spend over $9,000 a year with a 2% reward of 175 average a year. I Think Costco First before I do anything just to make sure I’m getting the lowest price possible with the greatest service ever!!!!!( ie; Allstate charged me $266 in NY for full coverage on my car…. Costco (Ameraprise) $180.) But that’s just my story

  11. marina says

    Costco is the best! I don’t understand why people don’t love it. Great prices, good selection, and a fantastic bakery!

  12. Heather says

    I’m a little late to the party (found this thru the Simple Dollar) but am glad you discussed this. Almost everyone I know has a Costco membership and loves it and the products. I had tried some of the Kirkland products and knew it was good. This year we used part of our income tax refund to “invest” in a Costco membership to see how we’d do banking on the money back guarantee if we weren’t happy. My initial reservations were the same as mentioned – saving enough to justify the membership fee.

    In two months, I have saved more than our $55 membership fee. I know I have to be careful though so my tactics are: to go in with a strict list; only get stuff I know I can use before it goes bad; keep a price book with the other places I regularly shop so I know if I am getting a good deal based on the unit pricing; and on the receipt, I am calculating my savings so I know we’re covering the membership fee. Plus, I am a sucker for those weird square gallons of milk (which are a full dollar cheaper than the grocery store)!

  13. Eric says

    I purchased a Costco membership in order to buy certain key items, like oysters, and in order to have access to the store. I’ve found out that Costco doesn’t carry oysters anymore, and have learned that the prices aren’t always the lowest at Costco. Especially when it comes to produce, and even electronic devices, Ive found the prices are higher at Costco.
    I am able to obtain food items I can’t locate elsewhere, but I’ve also noticed that even in the huge warehouse setting Costco is not a one stop shopping spot. I still need to resort to going to other stores to get exactly what I need. In the long run I imagine the membership fees are worthwhile, especially considering that it gives me access to the store…

  14. Dirk Shrek says

    As an employee of Costco for several years…. small secret, you can cash out your 2% rewards check at the register if you ask to cash it out. If a cashier tells you otherwise they don’t know what they are talking about. Have them scan your membership card, hit ‘total’, and then scan your 2% check which will be money owned to you. Ta-da! I cashed my check out this week. 180 smackers. Gambling money yo!

  15. primate says

    I purchase a minimum of 6,000 dollars worth of videos alone per year at Sam’s, on top of that a lot of dairy and some fruit and vegetables. I’m not getting any kind of deal at all, and when I return defective videos, I’ve been having to take a lot of crap from the service desk people, including the managers. The things I buy are the same price at Target, and when I go for tires, Sam’s doesn’t have what’s appropriate for either of my vehicles anymore. They try to push on me higher-end Michelins that I don’t need, then tell me it’s a 3-day wait for a special order, meaning I have to make a second trip back or get my tires elsewhere, which I’ve had to do. Where’s the convenience in that? Their annual membership appears lower than Costco’s, but I’m seriously considering switching since Costco is only half as far away as any Sam’s in my area and their customer service has become so anal and self-serving.

  16. ryan says

    you can cash out that 2% reward check anytime you want. all you have to do is ask any cashier and they will gladly hand you the cash amount for that check. the reason that it comes to you as a check is because it is sent to you through the mail and it would be pretty stupid on costco’s part to send cash through the mail wouldn’t you think?

    • Anna Summers` says

      It’s not that it is a check. It is that it is not made out to you and cannot be cashed at a bank. Or applied to your Amex credit card account like other “cash back” programs.

  17. says

    At the end of the day it is really dependent on the amount you spend, the type of items you buy and the savings on them. Like any other financial decision if the numbers don’t add up right stop it!! Don’t you think?

  18. Mr Sparkle says

    I’m from Australia and Costco has only fairly recently come to my area (about 3 years ago). Costco has some great products (love their curries and a few other things) but the rest is not really any better or worse than their compeditors so I can take them or leave them on other factors.

    BTW I am not a member of Costco (or any other store, you don’t pay for membership in Australian stores, that (was) “un-Australian”, until Costco entered the market) for the following reasons;

    Having to be “forced” to have and pay for a membership card or any type of loyalty card just erks me. By the time you add up all the annual fees from all your cards and accounts (membership cards / credit cards / savings accounts fees and the list goes on and on) that can run into many hundreds of dollars a year and for what? Just so you have the “previlege” to spend more money with them.

    Also this buying in bulk is discriminatory for economical shoppers, single shoppers and others who can’t / don’t want to spend a fortune on a grocery bill. Buying in bulk simply encourages over consumption and waste. I used to be married to a woman who would buy in bulk and then throw away literally half of all she purchased because it went off before it could be used and we had 3 kids at home at the time. That means in real terms the unit cost is actually twice the shelf price. And because I hated seeing the waste I would try to eat the (almost off) food rather than throw it away which meant I was overweight and unhappy. I am now single and don’t waste one ounce of food. And guess what, my grocery bills are a fraction of what they were before, I eat only food that’s fresh (not stuff going out of date all the time), I have lost a lot of weight because I’m not over consuming, i’m doing my bit for the environment and I’m feeling MUCH happier. I’m not poor (annual income is AUD $120k+) so i’m not doing this because I want to and not because I have to. The economics just makes sense (dollars – LOL). Living within your means is what it is all about for a stress free life and unfortunately the marketing strategy of ALL retailers is to get you to over consume while trying to make you think you are making a “saving”. Lokk through the BS people. Do what I do, lower your consumption, pay off your credit card to nil balance every single month to avoid interest charges which are just another thing that psuhes up the cost of consuming and start “living” and not simply “consuming”.

    • Phil says

      Not everything at Costco is sold in bulk. Buy a couple pairs of jeans ($13 ea in our market) and you’ve probably made up for the membership cost. There are two of us in our household and we buy most of our food from Costco. If you want an even better deal, find your local Costco business center (if you have one). Absolutely amazing deals! You do need to think through your purchases and food use. Costco tries to offer the most value for their member’s dollars while other stores try to make as much money from their customers’ purchases. There’s a subtle difference. Typically Costco offers a 10% to 15% markup over cost. Most other stores have a much larger markup. When you compare bacon to bacon purchases, make sure you’re paying attention to the product weight and ingredients. Of course some stores can sell bacon for less than Costco, but it might be a cheaper cut of bacon with more water weight etc. Also, Costco does not do “loss-leaders”. Loss-leaders are when a store advertises products that they sell for less than they purchased them (losing money on each transaction). Stores that offer loss-leaders expect you to buy other products which are not on sale and thereby they make up the loss and actually make money on your shopping visit. If you go to the store and ONLY buy the loss-leaders (stuff which is just too cheap to be found elsewhere) you could end up ahead of the game. Let’s say you go into your local xyz grocer and buy bacon for $2.99 per pound and at Costco bacon is $4.99 per pound. It sounds like the $2.99 deal is better. Is it? If it’s the exact same product it’s a loss-leader and buying it at xyz grocer is a great idea. But when you buy the other things at xyz that are not on sale, you’ve just spent more money than you needed to because that is exactly what a loss-leader is designed to do… to get you to buy other things that have a higher mark-up. But what if xyz always sold bacon at $2.99 per pound. Is it pre-cooked? Costco’s (I don’t know the exact price) Kirkland bacon is pre-cooked so when you buy a pound of bacon you are getting a pound of bacon. That uncooked bacon at $2.99… after the fat and water have burned off you often have only a few ounces of bacon remaining. Regarding bulk, not everything in bulk is perishable. I might buy a package of soap but it’ll last me a year or more. I might buy a canned-package of whatever and it’ll last for a while. The ethanol in our gasoline is the same as all of the other gasoline stations in the area. Our dog food is easily 1/3 the cost of comparable dog foods at the pet stores. You don’t want to know what’s really in the average dog food at the grocery stores… often those products contain euthanized pets (rendered meat and really gross things). I think it boils down to understanding the products purchased. When you truly understand exactly what you’re buying and you pay attention to your requirements, warehouse stores such as Costco always scores high ratings. When you understand that Costco’s mission is to offer the most value for their member’s dollars (versus earning as much money as they can from their member’s purchases) it starts to become clear why they’re so popular. They’re #1 in our book. By the way, excluding seasonal help, during the recent economic downturn Costco refused to lay any of its permanent employees off. Look at other warehouse stores and ask if they did the same. Costco cut back on pay-increases and stopped hiring for a while, but they kept everyone employed. Caring about their employees as much as they do their members – incredible. I love Costco!

    • Anna Summers` says

      I absolutely agree with everything you say. Considering all the overhead (employees, packaging, etc.) that shopping “clubs” DON’T have, that should be their profit right there. Conning people into paying them to “join” is just their way of scamming naive people out of their money to gather up EXTRA profit for their own pockets.

  19. John says

    I was a member of Costco for a few months and left because 99% of the prices are NOT less than other stores plus I was paying a fee to shop there.

    It would be an interesting study for one shopper to buy exclusively at Costco for a month and another to shop at the other stores for the same items and total them up. I bet the Costco bill is just as high or relatively close to the other bill. Totally not worth the membership.

  20. Janet says

    I have shopped at Costco for years, and really like the store. In 2007 I went to my local grocery stores and wrote down all the prices for all beef, pork, chicken, fish, and cheese. I went to Costco and compared – Costco was cheaper in price for pork, chicken, fish, and processed meats.

    Now, Costco is the same price as my local grocery stores on these items. The only difference is Costco sells one grade up in meats – same price, better quality of meat. But it’s the same price! And you are buying 3 times as much. My local grocery store sales prices beat Costco prices now. I haven’t seen any meat/fish savings in years. Cheese, eggs, dairy (milk, butter) are still a good buy (I freeze it). But not all of these can be readily frozen without changing the texture.

    Splitting the fees/cards among friends and family makes makes it affordable. If I pay 15 dollars for a card, then it saves me money.

  21. Barbara says

    It’s hard to beat Walmart’s price matching, but then, here in Texas, there are a lot of Mexican markets with outrageously low prices. Walmart is irked over having to match those prices and tries to reign in their policy, but since it’s nationally advertised, they can’t change the policy too much. I can get 5 avocados for $1, 20 oranges or limes for $1, etc.

  22. BarginShoppa says

    Costco is a rip off plain & simple. I don’t care if anyone disagrees. After all, you have the right to be wrong.

    I was a member for less than a year & after feeling like I didn’t get my $55 worth, I turned in my membership for a refund.

    Their prices on most items are usually not cheaper, if fact, they are higher. I’ve gone in the store many times & have compared their prices to other stores prices & I must say, I’m not impressed.

    They may have the occasional good deal every once in a while, but not enough to get your $55 worth. And sure, their gas prices are competitive some of the time, other times you can find gas prices that match Costco’s or find it a little cheaper (not much). After all, if I have to pay for a membership, I expect something in return for the money I’ve paid.

    They save a lot of money not having to hire people to help you (customer service), all their items are on pallets, your items don’t get bagged & their prices go up all the time.

    I understand that people buy the membership for various reasons. Some like getting specialty items at Costco that they don’t sell in other stores, some like the little food samples they hand out all over the store & some like the idea of belonging to a warehouse club (for some strange reason). And there’s nothing wrong with that. If you don’t buy the membership just for the sole purpose of saving money, then more power to you.

    But if you buy the membership for the purpose of saving money, then I suggest you think twice before buying a membership because they are not cheaper than other stores. Save your money.

  23. DF says

    Sorry but you CAN absolutely cash your executive cash bonuses at the membership counter for COLD, HARD CASH! Not sure who told you otherwise but you can redeem it for cash. I am an employee and was injured while I was deployed…they kept my pay raises and hired me back after I rehabilitated. There are a lot of people working but in my warehouse, you’ll find them folding the wrecked clothing dept or assisting in the TV section. Most members need help with electronics. Not sure if anyone needs their hand held but I RARELY see associates walking around Fry’s food helping me shop. LOL
    Sorry you hate the membership but the AMEX is FREE, no annual fee and you can defititely earn rewards by shopping everywhere else BUT the warehouse…esp for gas purchases. Shop wisely and don’t charge your butt off, you’ll be fine.
    I love the place. Never been into Sam’s but they don’t pay as well or treat their employees half as good. Besides, we should be paid MORE because the members are so damn rude…we get run over collecting carts and shopping in the warehouse. And I help everyone who asks for it…regardless of what I’m doing. You probably had a bad experience in a warehouse. Sorry that happened. But we get jaded by the rudeness of people.
    I will only leave my job if I can find a full-time one. It’s a great place to work…but be prepared to WORK!

    • JKJ says

      Cracking up about the “wrecked clothes”. I mean, honestly, what do you think is going to happen when you fold the clothes 8 deep and 10 high on tables??? How are you supposed to find your size WITHOUT wrecking it. Geesh, what do you expect.

    • Anna Summers` says

      Not true. When I read the fine print about the savings% on gas purchases – you ONLY get that IF you pay the $55, or more, for the CostCo “membership. And, if you are not a member on the day the check (for the money you have earned) is issued, then you don’t get the check at all. The paltry 1% on “everything else” is less than my CapitalOne, Chase, and DiscoverCard pay – and THEY will apply it directly to my statement balance, if I wish, not with a check made out to someone else that I have to drive to a specific store to cash/use. I don’t consider having to pay $55/yr to get back a percentage on gas (smaller than I can get elsewhere) to be FREE – $55 is not free.

  24. katie larson says

    really late to this conversation~ but got my check in the mail for being a ‘executive member’ and have to say I’m quite happy :) to think up front I had to pay $110, but my check is $103…. So I paid $7 basically for the entire years membership. Yes worth it. And that is with us not really shopping there the last few months(lazy, not as close as other stores) We defidently saved money on all bulk items and ‘name brand’ items like big cases of V8 and butter, cheese, ect~ I know before when I was buying diapers, wipes, formula~ I would have saved even more!! Love costco and very impresed with the kirkland brand, my only complaint is the food tasters~ always in a bad mood and mad if you dont buy whatever you sample(even if you dont like it) crotchity old ladies! Even had the gall to tell me that they make commission and I wasn’t helping her… rude. But the checkers/boxers are always super friendly and efficient(which I love:)

  25. says

    I have this conversation with myself every year when my CostCo renewal comes up. In fact, the renewal forms are sitting on my desk this very moment. I keep doing it, year after year, because it seems to make financial sense. I usually buy gas there because it’s cheaper. I don’t buy everything there, but what I do buy there, I buy because I save money.

    So put me in the “love it, with annual twinges of regret” category.

  26. luke says

    I saw a coupon book come in the mail from Costco the other day…WHAT? Now, I have to clip coupons and pay an annual fee?

    • says

      You don’t have to clip individual coupons, the Costco coupon booklet just has one master bar code you can bring to the register. Or, if you have the Costco smartphone app you don’t need the coupon booklet at all.

  27. Laura says

    One of my concern is why does Cosco does not let any one than the buyer to buy at the store I have a card an I got sick I sent my daughter to go buy the thing at Cosco an they did not let her because she was not the card holder she lives with me an I’m not going to buy another card if we both live in the same house hold that’s really rediculouse so what is Cosco going to do about that an my husband has the other card but he is out of town

    • says

      Hi Laura,
      I agree that is a frustrating situation. I assume they have that policy so people don’t take advantage and share the card with all their friends to avoid the annual membership fee. Unfortunately, honest folks like you get mixed in with the bad apples.

    • mom2abcd says

      If you buy Costco gift cards (online), you can give them to your kids and they can go into Costco and buy things without having a membership card.

    • akkobee353 says

      Hello guys!
      As an employee I can offer some insight to this common frustration. The number one reason only YOU may use your membership card is because it is a members only warehouse. Membership sales are where a majority of Costco’s profits lie, since the largest markup of merchandise you’ll see is 12% compared to others which start at 20% and go up. Say you bought a membership and let 10 of your friends or family use it. Yes, they spent money in the store, but Costco just lost out on 10 new members, who if they purchased their own membership would be more likely to shop frequently as well as renew the following year. The second, and I don’t know how old your daughter is, you must be 18 to make any purchases inside the warehouse (except food court and pharmacy). There are some hazards of shopping in a warehouse simply because it’s a warehouse and Costco will not be held responsible for a minor. The third reason is to protect YOU. Your membership card is connected to your personal information ie. phone number, driver license number, address and birthdate. If the employee does not pay attention to the name and picture or verify ID of the person using it, some one could gain access to that information without your knowledge. They could even go so far as to write a bad check on your account which you would be responsible for paying while the scammer enjoys their free merchandise. A way that situation could have been avoided, granted your daughter was 18, you could have sent your daughter in with a handwritten and signed letter stating the situation, and either yourself or your husband could have been temporarily removed from the account and your daughter put on it instead. Then she would have her own card for the time being. If something comes up and you ever have a question, please don’t hesitate to call your local Costco and ask to speak to the membership department, they will help you however they can!

  28. John Vella says

    Hi: a new Costco sort recently opened in my town (Guelph) and I am currently pondering whether or not to purchase a membership card. I’ve been in the new store twice to check it out and here’s what I found:

    1.) I was simply flabbergasted regarding the variety of products available. For example, I found products such as certain food items at Costco that I wouldn’t find elsewhere. This was very enlightening as I can now find these and other products in one lace.
    2.) Most grocery times were from the U.S. When I visited their grocery department, all their meat and most of their produce products came from the U.S. I was not impressed by this as I am try to purchase locally grown products as much as possible. If Costco were to provide more locally grown products, then I would’ve probably purchased a membership card by now.
    3.) Monopoly of product names: this may or may not be very significant, but when I toured the Costco store, I found an overwhelming amount of products by ‘Kirkland’. Now, I found this interesting as I almost apt to suspect that Kirkland my provide Costco some sort of a ‘reward’ for allowing Costco to carry so many of their products.

    So, that’s my take on the Costco situation. I am still in the process of deciding on the purchase of a membership card. I thank you for your time and wish you all well!

    • says

      Hi John, thanks for stopping by and commenting. Kirkland is actually Costco’s store brand, so the prices are really good and the quality is as good as brand name items (at least for the items I have tried myself).

      • Ed says

        Not to mention that the Kirkland Signature has a guarantee that if it isn’t as good or better than the name brand, they will refund your money (they will actually refund your money on anything so I guess the guarantee is moot). I can say that I have only found one item of Kirkland Signature that I didn’t like as well as the name brand and that was the Kraft Macaroni and Cheese, Kirkland wasn’t even close……but I can still get my Kraft at Costco for less 😉
        p.s. the Kirkland microwave popcorn is superb!

  29. Meng Wang says

    I became a member this week. I have a small family with only me and my wife, but I believe the membership fee is worth it. Say if the gas is $0.10 cheaper per gallon, and I need to fill 8 gallon per two weeks (most people need more than that because I have a hybrid car and don’t drive a lot), that’s $0.8 in save per two weeks or $20.80 per year. If I could save $3 per month (that doesn’t sound too hard) on other stuff then it covers the whole year’s membership fee.

    I’m impressed by its large selection and good price of food, but I found that for electronics like TVs, computers, softwares, security cameras, the price isn’t really competitive. I bought some lamb rack on the day I purchased my membership, but the lamb was already rotten when I checked right after I brought them home. I called Costco and they said we can return it but have to take it back. That means either I have to drive their right away or keep the rotten food in refrigerator for several days until next time I want to go to Costco. This made me less confident on Costco’s food quality.

  30. Shannon says

    As a mom of seven, we shop at Costco a lot! One thing to know is that you can cash your check (from the 2% back) at the checkout and put it towards your purchase and get the remaining cash back.

    Something else to keep in mind is that the samples are amazing. The kids like to go just to get food! We go enough that we are known by name and feel very welcome. The lines are never long, even on weekends…compared to SAMs Club where the lines are always long and no one seems to ever open new lines to get things moving.

    We love Costco :)

  31. M Patterson says

    We are going to join for the optical and the pharmacy. We will save the cost of membership on these items alone, in one purchase (the eye glasses), even if we buy nothing else all year.

  32. Rosa Mattless says

    For years I would mock Costco buyers….why pay a membership fee in order to save money and especially in bulk items. Well, in a month I will have been with Costco for one year with my husband convincing me to give it a try. I took an early retirement and with the way prices go up the minute you turn your back, it is good to have a place like Costco to have the items you need, in stock. Many wasted trips to Wal-Mart only to have the shelf empty and then I have to wait months before the item is on sale, again. Give Costco a try, I did and they proved me wrong and I was their number one mocker !! Sure beats running to 03 stores in one shopping trip, with the gas prices these days and the gas at Costco is the cheapest in town.

  33. BJBates says

    I simply ask a friend to buy me several gift cards in $25 increments. My Costco will allow up to $20 in cash if my purchases exceed the gift card. I’m single, so I’m not buying that much. Why purchase a membership?

    • Ed says

      I guess if you feel good about other people paying for the membership fee so you can take advantage of the lower prices, then that is the way to do it.

      • BJBates says

        As a matter of fact, Ed, I feel great about it. There is nothing unethical about using Costco money cards to shop as a guest. I learned about it on this forum. I called first to make sure it was okay and my friend who is a member also asked management if it was okay before she purchased the cards. It’s their policy to allow it. Also, they don’t have to allow me to pay up to $20 in cash over the amount on the gift card. It makes good sense for me since I don’t buy enough in a year to justify the membership.

      • Margaret Barnes says

        That’s how CostCo works! They charge a fee and the people who buy a whole lot are subsidized by people who buy much less, but pay the same fee they do. The whole thing is just to guarantee CostCo the steady income by spreading the costs (via the $55 fee) around amongst the customers unfairly. The store would be fine if they just gave savings based on their much lower expenses (fewer employees, no packaging or carry-out, forcing high quantity sales (often wasteful), etc., instead of charging an inequitable fee for questionable ADDITIONAL savings. I don’t think their prices reflect any larger savings than their lack of expenses from the lack of all the conveniences that they don’t supply.

  34. Horace says

    Personally, I like the atmosphere of a Costco. I have been a member for about 14 years. I had a Sam’s Club membership as well, a couple of times over the years. There is just no comparison to the service you get at Costco. I will gladly pay $110 a year to not have to deal with the scum bag shoppers at Wal Mart and Sam’s clubs. As far as things I can’t get at Costco, I go to a Kroger affiliated store, Smiths in New Mexico and Fry’s in AZ. I drive over 80K miles a year for my work and buy all my gas at Costco. It is rare that anywhere else is less on gas, plus Costco is closer than any other gas station to me. Sometimes I do get frustrated with Costco no longer carrying and item, but I certainly understand the business model. But as far as the complainers and whiners that do not shop at Costco, get your butts down to Wal Mart with the rest of losers.

  35. Felicia Wilkins says

    I’ve been a Costo member for over 5 years. I am an Executive Member, and Costco DOES give cash for the 2% rebate checks we earn. Although the checks can’t be cashed at your local bank, Costco gladly redeems them for cash. The checks can also be used to pay for purchases or renewing membership fees. This will be my 3rd year as an Executive Member and every since I upgraded, my rebate checks have ALWAYS been more than the $110 I pay to be an Executive Member, which basically means, I get to shop with Costco for free.

  36. Jerry J says

    One thing I ALWAYS bought at Costco was my Duracell Batteries. Nice large bulk packages and an extremely reasonable price. If fact I think Costco’s price is cheaper than anyone’s especially Walmart’s.

    I find the pump price for gasoline is one of the cheapest, if not the cheapest around. Not far from our Costco is the Indian Reserve and while the reservation price is usually cheaper I found that Costco can sometimes be equal. (not to drive that extra mile to save a penny or two).

    I have priced compared and I, too, have found many items at other grocery store to be cheaper. So we just buy those items elsewhere. Their milk and half-n-half is always cheaper, sometimes butter and bread too.
    Yes, there are many other items sold in bulk but as was said before it’s just my wife and I so we don’t buy bulk that can spoil.

    Those Kirkland batteries are ok, but it has been proven by tests that the Duracell is the best on the market. Once a year I load up on AAAs and AAs and 9volt.
    As for location, we live on the other side of town from Coscto, so we feel we have to plan our list as well as when I need gas.

    I don’t like the annual fee but they’ll never change it and I’m sure there is some strong argument to support the employees wages. Plus either deal with that fee or don’t buy there. Basically, in their formula, the more you shop there the sooner your fee is paid off.

    The one thing we noticed about Costco is that they sell DIFFERENT stuff than the mainstream retailer.

  37. verto says

    Ill put it like this, i might not be a big o shopper at costco, due to im a 2 person apt house, but well we both do GAS refills here every time, we save an average 10cents per gallon on premium quality, retail price vs shell prices, (25cents vs cheaper arco prices ) so.. whenever we hit both 500 gallons of gas we already made up for the membership of 45dlls thats about 4-5 or 6 months of loading every week 10gallons each car.. so the rest its just extra savings.

  38. Jerry Johnson says

    I love Costco as well. Not everything is cheaper but a lot is slightly cheaper. I have seen many, many products the same price or slightly higher at other stores. So you tell me.We find that they have different products than mainstream retailers.
    However, I still think the membership is a scam. One of the main reasons I stay is because the gas prices are usually the best in town. Is that enough justification? With all the people we see in Costco during any given day, you can’t tell me they’re not making a decent profit WITHOUT the membership.

    You and I have a choice. Buy the membership or don’t. I figure my gas savings covers the membership cost. Is that enough justification?

    Costco claims the membership fee covers cost to “offset’ things. Sorry guys. I don’t buy that theory.

  39. Franklin says


    Please do not shop or even go near a Costco. Your negativity is a cancer. You must be a ball of fun to hang out with at a party. Where I live we pay $.05 per bag at the grocery store, that and a couple of bucks to the kid who helps out with the bags adds up every week, but tipping a young kid making minimum wage is something I am sure you would never do, and I have paid for my Costco membership.

  40. Mi AM says

    Costco Scam: I had Costco executive membership for about 3 years and finally decided to give up. Pricing is quite of a game and they are not really better but worse than others. They keep models that are not available in other places most time and spec wise these models are poorer.

    Their groceries are always over frozen, most times having freezer burn and while brought home would not last as long. Their business strategy is quite deceiving.

  41. J Lombard says

    I think what I love most about Costco is the insanely long lines at checkout. And the fact that their fruit and vegetables are largely rotten. And the feeding frenzies at the sample kiosks. Shop wisely here and you may be able to save money though.

  42. Rob says

    Only so much shit you can buy bulk monthly, unless u need 10 tubes of toothpaste a month I have been to Costco once and compared to local grocery stores some of the stuff at Costco isn’t bad priced id say 60% of it is hiked through the roof. I am a chef and make all my food so I go fresh meats. Local butcher is way cheaper at 60.00 for a membership no way would I pay that. U feel obligated to shop there because u paid ur dues and don’t look anywhere else.


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