How Long Does It Take for Your Costco Membership To Actually Pay Off?

costco gold star member
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If the cost of a Costco membership makes you think twice about signing up, it’s understandable. After all, a Costco membership starts at $60, which is more expensive than both a Sam’s Club and a BJ’s Wholesale Club membership, which start at $45 and $55 respectively. However, a Costco membership opens the door to savings on everything from apples to tires. Plus, Costco’s house brand Kirkland Signature is a member favorite.

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But many consumers want to know how long will it take for the investment to pay off? To help sort it all out, GOBankingRates interviewed consumer analyst Julie Ramhold with DealNews. Here are the details on each of the memberships Costco offers, what it will take to recoup the fee to join and whether the expense is worth it. 

Costco Gold Star Membership

  • Cost: $60 per year

“This is the most basic membership tier and allows you to shop online and in warehouses,” said Ramhold. “It comes with two membership cards.”

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This membership is good for Costco members who are seeking everyday value from Costco and don’t want to pay the higher fee for the Executive membership.

How Long Will It Take To Pay Off?

“As this is the cheapest a Costco membership can get, it’s actually pretty easy for it to pay off relatively quickly,” said Ramhold. “One good stock-up trip can make it worth it, but if you opt to purchase a big-ticket item like a TV, if the savings are $60 or more, you can recoup the cost of your membership even faster. Even discounted gift cards can get close to making sure the membership is worth it. In some cases, you can purchase $200 worth of gift cards for $150 — the savings on this alone is nearly equal to the cost of a membership.”

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Costco Executive Membership

  • Cost: $120 per year

“This membership has all the benefits of the Gold Star, and also allows you to earn a 2% annual reward, plus you’ll receive a Costco Services discount and a Costco Connection magazine every month,” said Ramhold.

The 2% reward allows you to earn up to $1,000 per year on eligible Costco and Costco Travel purchases. According to the Costco website, members who spend approximately $4,170 per month on eligible purchases would be eligible to reap the maximum reward of $1,000 each year.

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How Long Will It Take To Pay Off?

Shop at Costco often enough and the 2% reward will pay for the membership,” said Ramhold. “This doesn’t mean you have to make weekly trips or anything — simply be strategic about your purchases, and be sure to look beyond only food items. Large purchases will obviously make it easier to reach the higher reward amounts, but even simple purchases like buying clothes, home goods and office supplies will help.”

To recoup the $120 membership fee, you would need to average $500 per month in eligible purchases from Costco, according to its website.

Costco Business Membership

  • Cost: $60 per year

“This is the business version of the basic Gold Star membership,” said Ramhold. “It allows you to shop both online and in warehouses, and you can purchase items for resale.”

If you own a business and want to purchase items for resale, but you don’t believe you will shop at Costco enough to maximize the 2% annual reward — and don’t find value in the other benefits the Business Executive membership offers — this membership is likely a good choice.

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How Long Will It Take To Pay Off?

“For businesses, this tier of membership can be pretty easy to recoup the costs,” said Ramhold. “It’s important to remember that if you’re buying something for resale purposes, you should factor in the cost of the membership as well as the items you’re selling. If you’re only purchasing items for business use, you can likely write off many of your purchases on your taxes as business expenses.”

Costco Business Executive Membership

  • Cost: $120 per year

“This membership includes all the benefits of the basic Business one and allows you to earn a 2% annual reward, receive a Costco Services discount and a Costco Connection magazine every month,” said Ramhold. 

If you plan to spend at least $500 a month on qualifying purchases, this membership will pay for itself with the 2% annual reward you’ll receive. Plus, you’ll have access to Costco Services discounts.

How Long Will It Take To Pay Off?

“This is another situation where you may be able to have a membership pay off based on both savings and business expense write-offs,” said Ramhold. “Do you have to travel by car a lot for work? Buying your tires from Costco with this membership will not only get you a bigger part of the annual reward, but you may also be able to write off said tire purchase on your taxes.”

Is the Costco Membership Fee Worth the Savings?

Whether a Costco membership fee is worth savings depends on which membership you choose and how you use it. Perhaps think of it this way: If you pay $60 for a Gold Star or Business Membership, you’ll need to save at least $5 per month by shopping at Costco to recoup your membership fee.

If you pay $120 for an Executive or Business Executive membership, you’ll need to save at least $10 per month to make it worth it. Alternatively, if you spend at least $500 per month in qualifying Costco purchases with either top-tier membership, you can earn the amount of the membership fee back in the exclusive 2% annual reward.

And get this — if you decide the membership fee isn’t worth it for some reason, Ramhold pointed out that all memberships have a 100% satisfaction guarantee. So, if you decide to cancel, you can do so at any time, and receive a refund.

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About the Author

Cynthia Measom is a personal finance writer and editor with over 12 years of collective experience. Her articles have been featured in MSN, AOL, Yahoo Finance, INSIDER, Houston Chronicle, The Seattle Times and The Network Journal. She attended the University of Texas at Austin and earned a Bachelor of Arts degree in English.
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