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Is the Costco Executive Membership Worth It?

Is the Costco Executive Membership Worth It?

There are many reasons why Canadians love shopping at Costco: the low prices on bulk items, cheap(er) gas, high-quality products, and their legendary return policies, just to name a few.

As North America’s most popular wholesale club, Costco offers two levels of membership: Costco Gold Star and the Gold Star Executive membership. The basic membership (Gold Star) is $60 per year, while the Executive membership offers several additional benefits at an annual cost of $120 per year.

A common question amongst Costco members is whether the additional $60 fee is worth the cost to upgrade to the Executive option. I’ve covered the various Costco services in other posts, so this article will focus squarely on the Executive membership, to help you decide if it’s worth signing up.

The Costco Executive Membership

As a Costco member, you may be wondering, does the Executive membership have more to offer than the regular membership, with its access to discounts on everyday products?

Here’s what you get with a Costco Executive Membership:

  • 2% cashback on most of your purchases, up to $1000.
  • Additional savings on many Costco services, including pet insurance, residential telecommunications, credit card processing, and more
  • Exclusive offers and extra discounts. You can receive special invitations for products and Executive-member only promotions and discounts.
  • Costco Connection magazine and costco.ca insert by mail
  • A complimentary household card

The 2% cash back is the most significant difference between the Gold Star and Executive tiers. Upgrading means you earn rewards, potentially enough to negate your annual fee. If you stack the 2% Costco cash back with a premium rewards credit card, you may be able to increase your earn rate to 3% or more.

CIBC Costco Mastercard

The CIBC Costco Mastercard was designed with Costco members in mind. To apply, you’ll need a Costco membership number. The Costco Mastercard enhances your Executive member benefits, by offering the following cash back rewards and other features:

  • 3% cash back at restaurants and Costco Gas
  • 2% cash back at other gas stations and Costco.ca
  • 1% cash back on all other purchases including at Costco
  • No annual fee
  • No fee for additional cards (up to 3)
  • Available installment plans on Costco purchases
  • Cash purchase interest 19.75%
  • Cash advance interest 21.49%

The CIBC Costco Mastercard doubles as your Costco membership card, so you don’t need to carry two cards when you shop. And while it’s a great choice for members, you can use any type of Mastercard when you shop at Costco.

Costco Business Executive Membership

Some Costco Executive membership perks are aimed at business members. For example, business owners receive access to competitive prices on payroll services, credit card processing services, and more. Here are some of the features available to business executive members.

  • Access to the Costco Business Centre online
  • Includes 2 membership cards per household
  • Add up to 6 additional people to your membership
  • Annual 2% cash back reward on eligible purchases
  • Exclusive offers and discounts
  • Purchase for resale

How to Save Money by Upgrading to an Executive Membership

If you already have a $60 Costco Gold Star membership, you’ve likely decided that shopping at Costco is at least worth the annual membership fee. But did you know that you can save money by paying even more to become an executive member?

Because the executive card rewards you with 2% cash back on eligible purchases, you’re earning when you spend, and you don’t get that with a Gold Star membership. At a 2% earn rate, if you spend $6000 on eligible Costco purchases throughout the year, you’ll earn $120 in Costco rewards, effectively canceling out your annual membership fee. In this scenario, you save $60 yearly by moving to the executive level.

The key is to spend enough money for the exec. membership. If you only spend $1000, you’ll only receive $20 in cash back rewards for a net expense of $100.

Items Excluded from the 2% Costco Reward

No matter where you live in Canada, the following items do not count towards the 2% executive member reward:

  • Prescription drugs
  • Tobacco products
  • Food court items
  • Bottle deposits and refunds
  • Taxes and levies
  • All Costco services
  • Eye exams
  • Tire disposal fees
  • Tire mounting and balancing
  • Tire stud installation fees
  • Gift certificates
  • Costco ship cards
  • Membership fees ($120)
  • Oil disposal fees
  • Home delivery charges
  • Gasoline purchases
  • Charitable donations
  • 3rd party insurance payments
  • Postage stamps
  • Environmental fees, deposits, or levies
  • All alcoholic beverages
  • Liquid milk and cream items (Quebec and Nova Scotia only)

Additional exclusions in Quebec

  • all pharmacy items
  • optical centre items and services

While this list may seem exhaustive, it’s important to note that most of the products on Costco shelves still count towards the 2% reward.

Should You Make a Costco Membership Upgrade?

The bottom line is that Costco executive members who spend at least $6000 annually, or $500 monthly, benefit from being at the higher tier. If you’re currently paying for a gold membership and are spending at that $6000+ level, it’s worth upgrading from your current membership. Remember that in addition to the 2% rewards earn rate, you gain access to special Executive-only discounts and special deals.

Comments

  1. mewithoutdebt

    I transferred from regular to executive membership 2 years ago and I usually get back 100 (which is all) or 100+ every year.

  2. Tom Drake

    mewithoutdebt,
    Yeah, it’s pretty easy to go there once a week and spend over $100… I go in for a few groceries and walk out with a lot more non-grocery items than I planned!

  3. Adeem Zafar

    I am not sure you are aware but the Membership Services rep told me that if I didn’t earn the $45 extra paid back, that I would be refunded the $45 back.

    • lisa

      I don’t believe that is the case… I just received a 29 cheque I am wondering if I shoulld inquire… it may be that they only do it if you ask… no ask no give? Lol anyone know if this is the case?

      • Charlie C

        Lisa, the $55 extra you pay for your executive membership is guaranteed. They are supposed “top up” your 2% refund if it falls short of $55. I would most def inquire.

        • Schultzter

          I remember that, but I think that’s only the first year, or else it was a limited time promotion.

        • Dan

          This is no longer the case and that policy has been discontinued

          • Cathy

            I was told on Saturday I would receive the difference back if I did not spend enough by the end of my 1 year.

      • Frances Young

        They will refund the difference if you don’t get the extra $55.00 it costs for Exex Membership. I found this out today from thr Costco help desk.

  4. Richard Rinyai

    I find that Costco is good, but they don’t carry “no name” type of items, which can be costly. Wouldn’t it be cheaper to go to a grocery store that carries these types of items?

    Thanks,

    Richard

    • Elaine

      They have Kirkland brand as their no name. Always great products.

  5. Frank

    Don’t forget that Costco sometimes carries unique items that other stores don’t have. Does anyone remember Cape Cod Kettle Cooked potato chips. You can’t find those anywhere in California because they stopped distributing them. You can only order them in bulk from their website $20+ BUT they have them from time to time at Costco for less than $5-6 family size. You just have to call in to check if they have inventory. It’s almost like an event shopping there. You know you’re going to get a good deal and if you have any issues you know their customer service with take care of you. Even their tire center is great with lifetime balancing and rotation for the tires that you buy there!

  6. Jeff

    I love wholesales, on the long term it does save a lot of money!

  7. Jeff

    Warehouserival.com offers great wholesale prices on 1.000.000+ products! No min. order quantity!

  8. Monica McNally

    I have lost my card. Could I have a new card sent to me as the closest store is over 300 km. away. Thanks

    • sylvia

      Next time u go in.. just go to membership desk & they’ll get u a new card.. doesn’t matter which store u go to.. I am a costco employee ?

  9. Mildred Carroll

    Why mess with Costco in the first place? I shop wholesale for my household consumables. My membership cost me $29 11 years ago and I have spent $16CDN/$12US to renew it each year. Right now, in March 2012 you can get a 1-year membership for only $1.00 (yep, that’s ONE DOLLAR). And you get Free products for 5 months for shopping every month, plus loyalty dollars to spend on more free stuff every month thereafter. Plus discounts for shopping online at other stores – the benefits are endless. Not to mention that this is a totally ‘green’ store so you’re eliminating the toxins from your home, reducing toxic waste in the environment, and improving your family’s health and safety. Request info at http://www.mom2six.com and I can show you how to set up your wholesale account. (Don’t worry, you don’t have to do a business, thought the business is a fun benefit!)
    Admittedly, if you need a lot of big ticket items like TVs or a ton of paper products (how much bathroom tissue can you use?) a membership might make sense, but I prefer shopping green for my normal household needs.

  10. Jane Savers @ Solving The Money Puzzle

    The gas bar is worth the price of membership. I get 2% on back on my executive membership on gas and 2% from Amex because I charge the gas.

    There are line ups for gas but I often go at 8:30pm on a Monday or Tuesday night on my way home it is usually pretty quiet.

    • Dave M.

      Personally, I like to gas up at Superstore using my PC debit or Mastercard. I usually get a $4.50 Superbucks coupon on $70 worth of gas (reward is 7 cents a litre). That’s over 6% back, and I can then use the coupon on any in-store purchase at Superstore. Even if one does not back with PC Financial, there is a 3.5 cent per litre reward toward Superstore purchases (with no annual membership fee).

      • Dave M.

        *bank* with PC Financial…

        Also, I should mention that we have been Costco members in the past and did not find it worth the membership fee. However, if one is already getting good value from the membership I can see where the 2% back on gas would be the icing on the cake 🙂

        • M

          According to the Costco website[N.Am.], gas doesn’t get a membership reward.Only through the Visa/ Mastercard. When I needed gas,I thought I would get the gas reward too.

  11. David

    I recently wrote about getting a Costco membership for free on my blog. I liked your post a lot and wanted to share mine with you. http://financialnerd.com/get-paid-to-join-costco/

  12. LoonieLover

    To follow up on what Adeem said, we opted for the executive membership one year, and did NOT earn the money back. Costco sent us (i.e. we didn’t have to ask for it) a voucher worth the amount of money that we had “wasted” by not earning the whole amount of cost of the executive membership back. The only conditions, as I recall, were that we had to use the voucher at Costco (not a big deal) and that we had, I believe, one year to use it.
    When we were signing up, after listening to the guy’s pitch, I asked if I understood it right that basically, worst case scenario was that we were giving Costco an interest-free loan. He though about it for a minute and then said that he had never thought of it that way before, but that yes, that was essentially what we were doing if we didn’t “earn back” the cost of the additional membership fee.
    All this to say, if you think this deal might work for you, go for it; you don’t have anything to lose by trying.

    • Dave

      I am to understand there is really no cash back but rather vouchers that must be used at Costco,
      also when you look at it yes we are giving Costco interest free loans, imagine the interest they must be making on this membership

  13. Smart

    It’s not worth it; if you were smart, you would:

    Buy a normal membership – buy gift cards online with a 2% reward credit card.

    • Smart

      And use those gift cards in store for your purchases. Zing: 2% cash back without the cost.

      • Smarter

        Why not use the 2% reward credit card at costco with your executive membership and earn a total of 4%?

        • Raj

          Gift cards are not eligible…See below..

          Executive Membership 2% Rewards Exclusions List
          Items that fall into the following categories are not eligible for the 2% Reward.

          In all provinces:
          prescription drugs
          all tobacco products (including: cigarette paper, lighters, matches and tubes)
          all food court items
          all bottle deposits and refunds
          all taxes and levies
          all Costco Services (click here for a complete list)
          eye examinations
          tire disposal fees (where applicable)
          tire mounting and balancing, and stud installation fees
          gift certificates and Costco Cash electronic gift cards
          membership fees
          oil disposal fees (where applicable)
          home delivery charges
          administration fees
          gasoline
          charitable donations
          third party insurance payments
          postage stamps
          environmental fees, deposits or levies
          other items, products and services specified as exclusions from time to time

  14. General Merchandise

    Hi! I just would like to give you a huge thumbs up for the
    great info you have got here on this post. I will be coming back to your blog for more soon.

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  16. BeSmartRich

    I do have the executive membership but I do not think it was worth it. If what Smart said works then his method would be the best way to take advantage on it.

    BSR

  17. Mi AM

    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.

  18. John Kinslow

    I have been at the “Executive Level” for close to a year and have not received any type of cash back. I will be going back to their regular membership when it is time to renew again.

  19. Mike

    We’ve had an Executive membership for many years. There’s some fine print that says if you don’t make enough in cash back they will refund you the difference in price between the executive and regular membership. The key is that you have to remember to go ask for that refund. What this means is that at worst you’re paying for a regular membership in a given year but at best you get it for significantly less, even free if you spend enough.

    This year, for example, our cash back cheque was only $16 because we haven’t bought much at Costco this year. The next time we go in we simply go to the customer service desk and they will refund the difference (55 – 16 = $39) and give us the money right there! So at worst, the membership will still have only cost us $55.

    Inconvenient? sure. But you never know in advance how much you’ll spend there in the next year so why not take the chance in paying less overall? There’s really no downside. And who know, maybe you’ll end up springing for that shed or trampoline or you’ll buy lots of gas and end up having the membership paid for and then some?!?

    Also, I don’t work for Costco or anything, I just thought people ought to know about that little Executive perk.

  20. Earl

    The Costco membership saved me $1000 on my last Ford vehicle purchase.

  21. garry self

    If you don’t earn enough cashback to cover the difference, you have to go and ask for it back at membership services. They will refund the difference and then downgrade you to a regular membwrship. You can’t keep the exec membership if you request a refund of the difference. And in my case, the tax on the difference wasn’t refunded – I had to complain further to get it back.

  22. John Appleseed

    Ordered an item for a birthday, delivery was set to take place by Friday latest as per the notifications from Costco and UPS – UPS Driver just kept going did a drive by and didn’t stop, didn’t call. After repeated calls throughout the day to UPS and Costco they said they couldn’t locate the item and I wouldn’t receive it until the following week.

    Results: Birthday ruined, 2 days off work waiting for UPS – lost salary & obvious financial hardship
    Costco’s answer: Here’s 25 bucks. Sorry we treated you like dirt and don’t value you.
    Membership – cancelled! I recommend you do your shopping elsewhere if you actually want to receive your goods on time as promised and if you enjoy a respectful shopping experience where you are valued – Costco does not value you. Costco does not respect you or your time.

  23. David Seligman

    I am out of the country most of the year and for some reason, Costco and their affiliation with the Heat Pump / Air Conditioning company ( name escapes me – probably because I’m frustrated with two times having been assured someone would contact me and still waiting a month later!!!!) –
    Has seriously dropped the ball on my request to have a heat pump installed on Bainbridge Island in our home there.

    I hope this letter gets a response so we can discuss unit, cost, and reimbursement I can count on. I needed this already 2 months ago.

  24. M

    Happy to see an updated Costco value review.I am a fan,and wouldn’t be surprised if Costco hits their $21B revenue in 2017 [read forecast in a 2013/2014 grocery magazine]. However,the executive membership no longer works.I found my spending has changed because of a lifestyle change.I now drive a plugin car,and I go where I can plugin.Costco got rid of their EV chargers [L2]in the U.S.,none in Canada. Also,I order more online,and want more environmentally friendly options.Examples: for 3 years,my area warehouses haven’t carried Tom’s deodorant;2 years,no wool t-shirts[great for heat]; executive coupons are mainly P&G products. In 2016, Costco Black friday didn’t offer the same level of 4K, TV[SUHD/OLED], or a 4k compatible soundbar with more than 2 HDMI connections during boxing week.My 2016 executive refund reflects the choices I’ve made.

  25. henry

    So today (middle of March) I get a reward coupon for my membership that I started last May. I was suckered into buying the Executive card because I would be guaranteed to get a minimum of 50% back on the renewal fee. The card cost $120 plus HST for a total of $135.60 so I was expecting a rebate of approx $68.00 So why are they only calculating my rebate on 9 months of purchases? They advertise a convenient chart on how much to spend each month to get back at lease the minimum 50%. So I looked up the fine print and sure enough they say the first year rebate is only calculated on 9 months. The next 3 months will be added to next years rebate. What bullshit! So now I hear only the $60 dollars will be rebated and not the tax. I didn’t want the Executive card in the first place, but was suckered into getting it by the sales rep. So caution. Whatever they say you need to spend per month in the first year, increase that by 33% to reflect they are only using 9 months. And the extra HST that you paid you can kiss that goodbye.

  26. Amy Acosta

    Today I found out that when you purchase from Costco directly through the instacart app, YOU DO NOT GET YOUR 2% CASHBACK FOR EXECUTIVE MEMBERSHIP FROM COSTCO. I have been a Costco member for more than 20 years, and started shopping from Costco through instacart around a year ago. Originally, when I signed up for instacart from the Costco website, it stated that I will get all my Executive Membership points (2% cashback) credited to my account. I put in my membership number in my instacart profile. This month when I got back my 2% cashback check, I realized that it was very small. Today when I got my instacart delivery the receipt was in the box from Costco with a membership number that was not mine. So I called Costco customer service. I was on the phone for a while and the first representative said all she can do is offer me a $5 gift card. The supervisor that I was transferred to said that there is no way they can calculate the 2% because instacart is a third part app, yet they have a complete record of everything I have ordered through instacart. I offered to send them a complete record of all my purchases through instacart, so they can give me the 2% credit, but she said no. She offered me a $20 giftcard for my troubles! She said that if I go to Costco.com and then click on the sameday delivery that gets you to order from instacart, then you will get the 2% back, but if you order directly starting at the instacart app you won’t get the 2%!!!! I was never informed of this rule beforehand. Were you? I was told the first time to enter my membership number and all will be taken care of. Since you never get a statement of the shopping details from Costco to calculate the 2%, now I’m wondering what else may not be credited. Let me know what you think.

  27. GJ

    I am not sure where the author is writing from. We have the Costco branded Citi Bank Visa that is exclusive to members (can be used as the membership card) and not a Mastercard.

    • Tom Drake

      Hi GJ, I’m guessing you’re in the U.S.? Here in Canada, we went to a Mastercard deal after the American Express partnership ended.

  28. Andrew

    The article’s claim that every Costco has a gas bar is false. My local Costco in Ottawa (Kanata) does not.

    • Tom Drake

      Good catch, I’ve edited to “most”! It’s probably my Alberta bias, just to check now, I looked up all the locations in Alberta and there is one in Calgary that also doesn’t have a gas station, but it opened back in 1990.

  29. Deborah S

    Costco also offers great rates on travel medical insurance from Manulife (cheaper than direct with Manulife) AND Executive members get a 5% discount, which can make a difference on an extended trip. We’ve been Executive members in the US, Canada, and Mexico since 2000 and are very pleased. Less pleased with the Capital One MC but that’s another post.

  30. Ira

    I’m a gold star member, the savings I get at the gas pump alone are worth the $60 yearly membership fee. and I used the Costco car discount buying a new car once. Now I’m apparently flagged for life for the annoying membership upgrade pitch at checkout, even though I don’t spend enough monthly to justify the membership upgrade cost getting the 2% cash back. Gas purchases don’t count, I learned that when I did get the membership upgrade for one membership cycle and it wasn’t worth it, they only cover the difference in membership cost for the first year.

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