Today’s membership fees are not set in stone.
Most important points
- Costco costs $60 for a basic membership and $120 for an executive membership.
- These costs could quickly rise if the warehouse giant’s CFO warns of rate hikes.
- An extra $5 or $10 off the price of a Costco membership probably won’t hit your wallet hard, especially if you’re a frequent Costco shopper.
There’s a reason so many people love shopping at Costco, despite having to pay a membership fee to walk through the door. Costco is known for its competitive pricing on a wide variety of grocery and household products. Plus, Costco’s rotary products are also often heavily discounted, so all in all, there’s a lot of savings to be made, even when you factor in that annual membership fee.
But soon the cost of a Costco membership could skyrocket. And that’s something for current and future members to keep on their radar.
Don’t be too distracted by today’s prices
The cost of a basic Costco membership is $60 per year. An executive membership costs $120 per year, but in return you get 2% cash back on all Costco purchases, the same way you might be used to getting cash back from a credit card. And so if you spend enough money annually at Costco, an executive membership can easily pay for itself.
Meanwhile, Costco’s CFO Richard Galanti recently said that Costco fees are likely to increase — it’s just a matter of when. And while Galanti didn’t point to a date when that would happen, the warehouse club giant’s last three rate hikes were five years and seven months apart. Since prices last increased in June 2017, that would indicate that Costco will have to pay a fee as early as January 2023. ouch.
Part of a growing trend
If Costco raises its membership fees, it won’t be the first service to do so in recent months. Not too long ago, Sam’s Club increased the cost of its memberships. And Amazon, which is more of an indirect Costco competitor, raised the cost of a Prime membership earlier this year.
A cost increase by Costco therefore does not seem unreasonable. But things may not sit too well with members either, many of whom are undoubtedly pressured by inflation.
Should a Costco fee increase make you reconsider your membership?
Not necessary. First of all, Costco offers so much value that for many people it’s still worth paying for, even at a higher cost. But there’s also a good chance that surcharge increases coming on the pike will be modest.
For example, Costco might increase the cost of a basic membership to $65 and the cost of an executive membership to $130. But in that case, we’re talking an extra $5 to $10 over the course of a year for Costco access. If you use your membership often, keeping it is probably an easy decision.
If you’ve been using your Costco membership less and less over the past few years, an increase in fees may cause you to reconsider a renewal. But all in all, current Costco members shouldn’t be concerned about higher costs. It’s the fees Costco charges for membership that allow it to maintain its ultra-low prices. And that’s actually something to be thankful for.
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