IS A COSTCO MEMBERSHIP REALLY WORTH IT?

In Canada alone, Costco serves more than 10 million members across 100 warehouses. Canadians love Costco — in fact, Canada has nearly double the stores per capita than in the U.S., and Canadian stores are more profitable from an overall operating income standpoint. Many regular Canadian Costco shoppers are also quite devoted to the store, especially once they invest in a membership.

Let’s explore what it means to be a Costco member and what each membership tier offers. Is the price of a Costco membership worth it for your lifestyle? Is the cost worth the perks you’ll receive? We’re about to find out.

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How does a Costco membership work?

Costco memberships, regardless of your country of origin, may be used at any Costco location around the world. To be eligible for a membership, you must meet the following criteria:

• 18+ years old
• Live in a household where no one else currently has a Costco membership
• Have a legal/valid Canadian ID or document proving your identity.

Comparing Costco membership tiers

If you are eligible for membership, there are three tiers you may choose from, each of which comes with specific perks and unique pricing. Here's a quick breakdown of each Costco membership tier:

Gold Star

The Gold Star Costco Membership includes up to two household cards (one member, plus one additional household member 18 years of age or older) for $65 CAD, renewable annually. This membership is the most basic of the three and allows you to purchase products at any Costco location.

If you prefer to shop in bulk, or prefer to make one stop rather than several for the household items you need (ranging from groceries to electronics), a Gold Star Costco membership is a good option for you, and is likely worth the annual investment.

Business

A Costco Business membership allows you to make personal, resale or business-related purchases at any Costco location. Like the Gold Star membership, the annual fee is $65 CAD but includes more perks, such as:

• A free household card
• Ability to add affiliate cardholders for $65/EA
• Purchase for resale

With this plan, members must provide Costco with appropriate resale information to take advantage of the purchase-for-resale perk.

Whether you run your own business or are a buyer for a larger company, a Costco Business membership could be a good option if you frequently purchase a variety of items for business in bulk, or if you regularly buy items for resale purposes.

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Executive

Finally, the Executive Membership is the highest tier of the Costco memberships and costs $130 CAD annually. This includes the standard $65 membership fee plus a $65 upgrade fee, and will provide:

• A free household card
• Annual 2% reward on qualified Costco purchases (terms and conditions apply)
• Additional benefits and greater savings on Costco services (i.e. dental plans, identity protection, business health insurance and more)
• Extra benefits on Costco Travel products

Of the three Costco membership tiers, the Executive level clearly provides the most benefits, but it’s important to determine whether the $130 annual membership fee is worth the investment for your personal needs or business before subscribing.

Other Costco membership perks

Did you know that you can use Costco for more than just buying in bulk?

Costco offers a range of special discounts and services to its members, ranging from car insurance, home insurance, identity protection, home loans, personal checks, self-storage, business and personal health insurance, and travel services. They also offer payroll and payment processing services for businesses. Other Costco services to check out include:

• Costco online shopping: Costco delivers an online shopping experience that’s similar to what many online retailers offer. You must register for an account to access and place orders for the vast collection of products and services available. Upon registration, your Costco membership is linked to your online account.
• Costco Travel: Costco’s collection of travel booking services may be your go-to option if you’re looking to book your next cruise, vacation or car rental. While Costco has a solid reputation, it’s still always a good idea to do some comparison shopping to help you find other competitive rates.
• Costco Gasoline: Most Costco locations provide gasoline that’s often priced 6 or 7 cents per litre below most of the leading gasoline retailers. If you refuel frequently, this gasoline discount may be worth the cost of your Costco membership.
• Costco Pharmacy: Most Costco locations include a full-service pharmacy offering a wide collection of health-related products and services. Costco members in all provinces but Prince Edward Island and Quebec can order prescriptions online and have them delivered to their home address.
• Costco Optical: Most Costco locations also avail an optical department. You don’t need to complete an eye examination from a Costco location to buy eyewear products.
• Costco credit card: Costco warehouse locations only accept Mastercard branded credit cards. Members can enjoy the no-annual fee CIBC Costco Mastercard. The card offers up to 3% cash back on eligible purchases.

While Costco’s extensive list of services is impressive, membership will only make sense if you have the means to shop and buy in bulk. Let’s take a closer look at whether a Costco membership ultimately provides a satisfactory return on spending for the average customer.

Is getting a membership to Costco worth it?

A Costco Gold Star or Business membership automatically makes sense if the retailer tends to be your one-stop shop for your grocery, home, tech and business needs. Basically, if you prefer buying in bulk but aren’t completely sure whether you’ll spend enough to benefit from an Executive membership, a Gold Star or Business membership is highly recommended.

Obviously, the biggest advantage of a Costco Executive membership is the 2% cash back savings; however, this 2% cash back only makes sense if you naturally spend enough to reap a good return. You shouldn’t be struggling to spend more when you shop just to make an Executive membership worth it.

Items that can pay off your Costco membership

If you’re still weighing whether a Costco membership is worth it, you probably need to take advantage of the items that can help pay off your membership. These may include:

• Tires: You might be paying too much buying your tires outside the Costco warehouse club. Tire purchase prices at Costco are a huge bargain. You can get up to $80 off certain tire brands, which can help conveniently pay off your Costco membership.
• Guarantees: The Costco guarantee system gives more reason to shop at the warehouse club, and can single-handedly pay off your membership. If you’re dissatisfied with your Costco membership, you’ll get a refund for its full cost.
• Gas: Filling up at Costco stations will help you save money on gas. Filling up at one of its gas station a few times a month can earn you enough savings to pay for your Costco membership.
• Wine: Your average savings at Costco wine will be about $5 per bottle. A dozen bottles per month will single-handedly pay off your Costco membership.
• Movie tickets: Costco may sell you two movie tickets for nearly half the cost of purchasing at the box office. If you’re an avid cinephile, the few dollars off will add up to an amount worth the cost of your membership.

Get more benefits with the CIBC Costco Mastercard

Interested in more member benefits? The CIBC Costco Mastercard, exclusively for Costco members, provides additional rewards. Whether you’re a Gold Star, Business or Executive member, you can use your CIBC Costco Mastercard on Costco purchases and everything else to receive 3% cash back on restaurants and Costco gas, 2% cash back at other gas stations, electric vehicle charging stations and Costco.ca, and 1% on all other purchases including at Costco.

If you don’t want the CIBC Costco Mastercard, there are some other great credit cards that are ideal to use at Costco.

Possible return on spending

To determine whether a Costco membership is worth the annual investment, we’ll need to calculate your potential return on spending. To give you a better idea of your possible savings, here’s a projected rate of return for one year as an Executive member using the CIBC Costco Mastercard:

• $4,200 CAD = Costco visits ($84 annual cash back)
• $3,500 CAD = restaurants/dining ($105 annual cash back)
• $2,100 CAD = gas ($42 annual cash back)
• $8,800 CAD = misc. ($58 annual cash back after $3,000 spend)

These annual projections reflect the average Canadian’s spending habits in each category. In simplified terms, an Executive level membership is worth it if you’re spending at least $3,000 per year on Costco visits.

What's best for you matters most

Ultimately, it’s important to sit down and figure out your annual spending before investing in a Costco membership, especially for an upper-level tier like the Executive membership. If your calculations show that you’ll likely spend enough to cover the annual fees and you frequently buy in bulk, a Costco membership could be a great financial option for you.

If you love Costco and believe in its business, it may be worth it to buy Costco stock. Its dividends could fund your membership.

This article Is a Costco membership really worth it? Canadians want retailers to make it easier to buy homegrownoriginally appeared on Money.ca

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

2025-03-10T18:42:53Z