One of the best ways to save money when shopping, especially if you buy in bulk, is to join a warehouse club. These clubs charge you an annual membership fee, and in return you get access to special deals on different products — and even some services. One of the most popular wholesale stores is Costco. In this article, I take an in-depth look at everything Costco has to offer, to help you determine if a membership is right for you.
Many people agree that a Costco membership is worth the $60 a year. After all, that amount can be saved in one trip alone, with some of the non-grocery items sold at Costco. For example, I’ve found products like KitchenAid mixers and Ralph Lauren dress shirts, both at half the price found in other stores.
In some cases, just buying that Ralph Lauren dress shirt is enough to justify the cost of the membership for the entire year. When you compare prices, it becomes evident that you are often ahead, depending on your family’s shopping needs.
The savings that come with a Costco membership can be significant, providing that you stick to your list, and shop carefully. Of course, this is often easier said than done. With so many tempting items on the shelf, shoppers often end up spending on impulse purchases.
Costco is great for larger families since you can often find items to buy in bulk. Even a small family can benefit from a Costco membership since it’s possible to preserve for a later date some of the items purchased.
Regardless of your family size, it’s important to be realistic about how quickly you will go through perishables. While it’s possible to keep canned goods for a long time, and you can freeze meat and cheese items for later, produce like lettuce and bananas isn’t so easy to preserve.
In other words, make sure you don’t buy too much for your family since you don’t want to throw away half of your purchased food.
How A Costco Membership Works
Gold Star Membership
There are essentially three types of Costco membership. It begins with the Gold Star membership, at $60/year. An additional card is available free of charge for a spouse, or another family member over 18 who is residing at the same address.
The Gold Star membership is ideal for anyone who wants access to wholesale prices, but is unsure whether they will spend enough money to benefit from a higher level of membership.
Costco offers a Business Membership to licensed business owners, managers, non-profit organizations and government agencies. Like the Gold Star membership, the annual fee is $60, and a complimentary card is available.
The Costco Business Membership differs in that it makes up to 6 additional cards available at $60/each, and also allows members to purchase items for resale. Business members do need to make Costco aware of any information regarding items they plan for resale.
Executive membership offers several additional benefits, at an annual cost of $120/year. It also includes a complimentary spousal card, and can be used by business members. Let’s take a closer look at the added benefits of the Costco Executive membership:
The Costco Executive Membership
You may be wondering whether the Costco Executive membership is worth the extra $60 a year.
Does the Executive membership really offer so much more than the regular membership, with its access to discounts on everyday products?
Here’s what the Costco Executive Membership provides:
- 2% cash back on most of your purchases. At minimum, you’d want to at least make back the additional $60 cost you paid for the Executive level. An even better scenario is if you can get $120 back to pay the entire cost of your Costco membership.
- Additional savings on many Costco services. Costco offers services ranging from a real estate program to mortgages to insurance to business services.There are also some extras available to executive members, at a cost, including roadside assistance and cheaper cheque printing.
- Exclusive offers and extra discounts. You can receive special invitations for products, as well as get a first look at promotions and discounts.
With the cash back, you will need to plan your spending if you want to make up the cost of your membership. For example, to get a $60 reward, you would need to spend at least $3,000 a year, or $250 a month.
This is relatively easy if you do most of your regular shopping Costco. Most families spend at least that much on groceries, personal care items, and clothing. Simply make a list, and plan to shop at Costco. Not only will you benefit from discounted items, you will also get cash back and have access to a variety of other perks.
Now, if you’re hoping to pay for the entire $120 membership with your annual reward you would need to spend $6,000 a year, or $500 a month.
This amount might be more than many will spend at Costco, but it’s definitely possible to spend that much if you are doing the majority if your grocery and other shopping there. It’s even easier if you have a business and get most of your needed supplies from Costco.
Some of the top benefits of the Costco Executive membership are aimed at business members. They receive access to competitive prices on payroll services, credit card processing services, and more.
Even non-business shoppers can benefit from this membership. As long as you’re spending over $250 a month at Costco, the executive membership is probably worth the extra cost, since you can make up the added fee with your cash back.
However, you want to make sure that you are shopping according to a plan. If you pay for the membership, don’t spend just for the sake of spending, make sure that what you’re buying makes sense for your family.
Additional Costco Services
In addition to the regular warehouse, Costco offers many other services, which are definitely worth checking out. These include photo development, a range of printing services, home and auto Insurance, life and travel Insurance, professional installation services, as well as a tire centre.
Costco Online Shopping
Costco makes shopping even easier by making a large selection of products and services available for purchase online. Costco’s online shopping experience is similar to that of most other online retailers.
Prior to placing your first order, you’ll need to take a moment to register, at which point your Costco membership will be connected to your online account. Shipping is available to most areas, with the exception of a few, very remote locations.
A somewhat lesser known fact about Costco is that they offer a full slate of travel booking services to members. In fact, they just may be the place to go, to book your next all-inclusive vacation, cruise, or car rental.
Make sure you shop around before booking, however. While it’s true that Costco Travel has established a strong reputation based on service and value, online travel websites are very competitive, so there’s no guarantee that any single provider will always have the best deal.
If you live reasonably close to a Costco location, you can take advantage of reduced prices at the gas pump. Gasoline is available at all Costco locations, and is often priced 6 or 7 cents/litre below leading gasoline retailers. Depending on how often you fuel up, this discount alone may be worth the cost of membership.
Most Costco locations feature a full service optical department. They accept current prescriptions from licensed doctors, optometrists or ophthalmologists, and you don’t require an eye exam from a Costco location in order to purchase eyewear products. That said, Costco does offer full eye exams at most locations, completed by independent Doctors of Optometry.
Most Costco locations come equipped with a full service pharmacy, and can be a great way to obtain competitive prices on a wide range of health related products and services.
For added convenience, Costco Members in all provinces, with the exception of Quebec and Prince Edward Island, can now order prescriptions online and have them delivered directly to their home address.
Costco Credit Card
It’s important to understand what credit cards are accepted at Costco Warehouse locations.
Currently, Costco Canada only accepts Mastercard branded credit cards. In the past, they had a relationship with American Express, but that ended in 2016.
Capital One offers a Costco Mastercard exclusive to members. It’s a no-annual fee card, which offers 3% cash back at restaurants, 2% on gasoline purchases, and 1% on all other purchases, once you reach $3000 in annual spending. The first $3000 of regular purchases is set at .50% cash back.
Other benefits of this Costco-branded Capital One Mastercard include Purchase Assurance, Extended Warranty and Auto Rental Insurance.
Helpful Hint: Costco Visa Card Hack
While it’s true that Costco does not accept Visa credit cards for purchases, it does allow you to use your Visa card to purchase Costco Cash Cards, otherwise known as gift cards, online.
This makes it possible for Visa Card Holders to collect reward points while using the cards to shop at Costco locations.
How to Shop at Costco Without a Membership
If you’re still not sold on becoming a Costco member, there are ways that you can benefit from their wholesale prices without a membership.
A Costco Cash Card (gift card) will get you in the door, can be used by non-members, and can be purchased with a minimum balance of $10.
There is one caveat. Once the card balance has been used up, it must be reloaded, or another one purchased by a Costco member. In other words, you need to rely on a Costco member to help you out, which may be inconvenient for either party.
For U.S. shoppers, Google Express is now offering shoppers access to Costco products, without requiring a Costco membership. Additionally, shipping is free for orders over $25. Unfortunately, this service is not yet available to Canadian residents.
Costco Return Policy
Costco’s return policy has become a thing of legend. In fact, a simple Google search will reveal some downright impressive Costco return stories, with items sometimes being accepted back years after the initial date of purchase.
Simply put, Costco guarantees client satisfaction with every purchase, and will offer full refunds upon return of an item. There are a few exceptions. Most electronics, for example, are limited to a 90-day return policy, and items that have a limited useful life expectancy, such as batteries or tires, may be subject to a product-specific limited warranty.
And their return policy isn’t limited to their products. Costco will also refund memberships in full to any customer who isn’t satisfied with their shopping experience.
Summary – Costco Membership Recap
Let’s face it, there are a few irritants to shopping at Costco. For starters, it always seems to be incredibly busy, and simply finding a parking spot can be a chore in and of itself. For the fee averse, the idea of ponying up the cost of an annual membership can be annoying.
But irritants aside, the money saving opportunities may be too great to ignore. As a reminder, here’s a list of my favourite reasons for buying a Costco membership.
- Leading prices on consumer staples, such as milk & bread.
- Wholesale savings from buying items in bulk.
- A near legendary return policy.
- Regular gasoline discounts for members.
- A focus on high quality products, from food to clothing.
- A wide range of additional services, including, travel, optical, and pharmacy.
If you haven’t yet taken the plunge and become a Costco member, it’s definitely a step worth considering.