These Fee Increases Are Coming to Your Costco Membership
Written by
Vance Cariaga
Edited by
Travis Woods
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One of the advantages of warehouse clubs like Costco is that you can save a lot of money on groceries and household items compared with traditional retailers, but you have to pay for the privilege through membership fees. If you are a Cosco member, that privilege is about to get more expensive.
Earlier this week Costco announced that its annual fees will rose to $65, up from $60 previously for U.S. and Canada Gold Star, business and business add-on members, The Wall Street Journal reported. It was the first fee hike since June 2017. The warehouse retail chain will also hike the price of its executive membership plan to $130 from $120, while the reward cap will rise to $1,250 from $1,000.
In a July 10 news release, Costco said the fee increases would affect about 52 million memberships, a little more than half of which are executive memberships. That total is up from about 35 million members the last time fees were hiked. All increases will go into effect on Sept. 1, 2024.
Costco currently operates 882 warehouses, including 609 in the U.S and Puerto Rico. The rest are split between Canada, Mexico, Japan, the UK, South Korea, Australia, Taiwan, China, Spain, France, Iceland, New Zealand and Sweden. Costco also operates e-commerce sites in the U.S. and several other countries.
The latest fee increase is hardly a surprise. Costco Chief Financial Officer Gary Millerchip who took over the position about four months ago, told The Wall Street Journal in June that certain changes were forthcoming. Millerchip’s predecessor as CFO, Richard Galanti, said last year that it’s “a question of when, not if” fees will be raised.
On average, Costco has raised its fees roughly every five-and-a-half years, CNBC reported, which would have put it on track to raise the fee in late 2022 or early 2023. But the company held back on raising fees then because consumers were already dealing with soaring inflation on groceries and other essentials.
As CNBC noted, Costco relies on membership fees to drive most of its revenue and help keep merchandise prices low. Its rival, Walmart-owned Sam’s Club, raised its membership fee in 2022 for the first time in nine years.
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