Is Costco Membership Worth It?

Costco Wholesale entrance with a cart pusher
One of my local Southern California Costco entrances

A basic Gold Star membership at Costco costs $60 annually ($120 for the Executive tier), so you would need to save at least $60 in purchases for your membership to be worth it. Costco is famous for its deep markdowns and overall lower prices on anything from mixed nuts to widescreen TVs.

I compared Costco’s prices to its competitors, and Costco was a few pennies less or several dollars more. I took a close look at Costco and learned when a membership made sense and when it didn’t. I also uncovered ways to save money at Costco and increase the value of a membership.

People most likely to benefit from Costco membership

Sometimes it’s dead simple to figure out if you’ll recoup and benefit beyond the intial membership cost of a $60 membership. In my opinion here are folks who more than likely spend enough to make it worth it:

  • restaurant owners
  • families or roommates of four or more
  • anyone who throws more than 3 or so dinner parties a year
  • anyone who throws Costco-themed parties
  • anyone who rents cars from Enterprise and needs a 2nd driver added (Costco gives a free 2nd driver when booking Enterprise through their portal, while Enterprise direct charges $15 per day for this)
  • people who will buy more than a couple small or large appliances priced at $250+ each, yearly
  • people who can wait for deals to buy laptops or computers. Costco regularly has electronics deals that beat out top competitors like Best Buy and Amazon by at least $50-100.

If you don’t fall into any of those categories, you may still very well benefit from a membership. Just read on below to help decide if what you buy and how much you buy will qualify you!

Costco membership tier differences

red Costco membership banner

Costco has three types of memberships: Executive, Business, and Gold Star, all of which are renewed annually. Here are the differences between them:

Membership TypeAnnual FeeFree 2nd CardAdd Extra CardholdersRewardsAdditional Benefits
Executive$120
Business$60✔ $60 each
Gold Star$60

The Business membership allows for resale of purchases as long as the owner shows proof to Costco of where and how the products will be sold. Business members are also able to purchase additional cards at $60 apiece for business associates.

Is Costco *Executive* membership worth it?

The Executive Membership has the most benefits of the three. Executive members have access to Costco’s Travel Services and are also entitled to discounted business services, home and life insurance, appliance delivery and installation.

Executive membership perks include:

  • lower prices on check printing
  • lower prices on car buying
  • roadside assistance for free if you have Costco’s auto insurance
  • free monthly edition of The Costco Connection magazine (why though)

The 2% rewards program

An Executive Membership has an annual 2% rewards program, which many people enjoy because they get a little bonus for most of their purchases they’ve made throughout the year. Of course, you’d have to spend $3,000 to make back the additional $60 for the Executive membership upgrade.

I buy a lot of groceries, probably more than a 2 or 3 person household for supplies for this food blog and still don’t spend enough to make this upgrade worth it (I have to buy probably half of my groceries at other supermarkets since Costco is limited in selection).

Executive membership, like all the other tiers, lets you have one free household card, but the purchases made by that person do not count towards your rewards (why!!).

Also, the 2% Rewards program has some restrictions. For example, the 2% will not be applied to certain purchases, like cigarettes, gasoline, alcohol in 24 states, prescriptions, the food court, and travel-related purchases.

How to save money on Costco membership fee

Every now and then, Costco offers a discount in the membership fee with a special program that targets new potential members. In 2020, Costco partnered with Groupon and offered a Gold Star membership at the regular membership fee of $60 and threw in two $40 gift cards, one for in-store purchases, and the second for online purchases over $250. 

Naturally, there was a hitch. When you signed up for the membership, you had to agree to have it automatically renewed every year. Otherwise, you didn’t get the gift cards. This offer, of course, was valid only for new members.

The current Groupon promotion – and the only promotion I could find – gives you a $20 gift card when you sign up for an Executive membership and a $10 gift card when you sign up for the Gold Star membership. You can also take advantage of this promotion on Costco’s website.

How much money could you save shopping at Costco?

mountain of toilet paper rolls at Costco
This location’s ready for the next toilet paper frenzy

I compared several popular Kirkland Signature brand products with the in-house brands of Walmart, Target, and Trader Joe’s to determine how much money I could save at Costco.

StoreOrganic Chicken BreastOrganic EggsMilkExtra Virgin Olive OilToilet Paper
Costco$4.49/lb$7.29/2 dz ($3.64/dz)$4.49/gal$17.99/35.6 fl oz ($.50/fl oz)$21.99/30 rolls ($.73/roll)
Walmart$4.72/lb$3.62/dz$3.59/gal$4.96/25.5 fl oz ($.19/fl oz)$21.98/24 rolls ($.91/roll)
Trader Joe's$5.99/lb$4.99/dz$3.49/half gal ($6.98/gal)$8.99/32 fl oz ($.28/fl oz)$4.99/12 rolls ($.41/roll)
Target$5.99/lb$3.89/dz$2.99/gal$6.99/16.9 fl oz ($.41/fl oz)$14.89/18 rolls ($.82/roll)

As you can see, at first look, it seems that Costco isn’t always the cheapest. Buying in bulk means an initial outlay of cash, and some prices aren’t substantially less than Walmart or Target.

But one of the biggest money savers is Costco’s Kirkland Signature brand. Costco partnered with big-brand companies to produce high-quality products at cheaper prices. Kirkland’s French vodka is so good that there were rumors it was actually made by Grey Goose. (It’s not.) So even though the Kirkland toilet paper is more expensive than Trader Joe’s TP, the Kirkland TP is softer and less abrasive.

Rotisserie chicken

Costco's famous rotisserie chicken shelf

What I love most about Costco is I can find certain items I can’t get anywhere else, starting with Costco’s ridiculously delicious whole rotisserie chicken for $4.99. Costco sells 60 million of those juicy birds every year and though they apparently lose money on them, the price never increases. 

USDA Prime beef

USDA prime steaks at Costco

At your local market, you’ll probably see beef that’s stamped USDA Choice, but on the rare occasion you do see USDA Prime instead, chances are it’s not. First, USDA Prime has a lot more marbling, which makes it so juicy and tasty. You can simply look at the meat–if there aren’t dozens of small white marble lines (fat), like most steaks at regular supermarkets carry, then it’s most likely Choice.

Second, actual USDA Prime accounts for only 3-3.5% of all beef in the U.S., and it mostly goes to hotels and restaurants. But Costco somehow does sell USDA Prime beef in assorted cuts. All Costco’s meats – not just the USDA Prime – are much lower in price than anywhere else. To get that savings, though, you have to buy a piece of cow that serves at least 8 people.

Money-saving tip with Costco pricing codes

A secret I learned about is that you can save even more money at Costco by keeping an eye on their pricing codes. If something is marked, for example, $4.99, that’s a regularly priced item. If you see weird pricing, like $4.79 or $4.49, the item has been marked down, sometimes by quite a bit. 

If you see .88 or .00, that’s a manager markdown, and either it’s a returned item that’s undamaged, or the manager is clearing out that item. Finally, an asterisk means that the item will no longer be available and is at its lowest price.

A Costco membership doesn’t always save you money

refrigerated fresh produce room at Costco

Costco’s produce department is impressive, and you’ll find a lot of organic fruits and vegetables. (Make sure you bring a warm jacket for the freezing refrigerated section.) But it’s also where people waste the most money. Unless you’re feeding a family of ten or throwing a huge party, there’s no way you’ll consume those enormous bags of salad or eat your way through a box of apples in time before it rots. In my mind, you’re just tossing money in the trash.

Costco has its own travel agency, Costco Travel, and as tempting as it is to think you’d be getting a deep discount with your membership, you don’t. I did a couple of sample bookings – a three-night trip to New York City for two and a 9-day cruise in the Mediterranean – and prices were the same as other online travel-booking services. The only benefit came with the cruise; depending on how much you pay for the cruise, you’ll get a Costco gift card for shopping onboard.

Other hard-to-price perks of Costco membership

tire rack at Costco's tire center

If you’re a car owner, then your Costco easily covers the cost of membership with the many discounts with auto servicing, tires, auto-buying, car insurance, and even car rentals. Your membership gets you a members-only 15% discount on all repairs, maintenance, and auto parts. It’s also incredibly convenient because you can schedule servicing and shop inside while it’s being done.

You can save money buying Costco’s tires and installation, which also includes Costco’s Lifetime Maintenance Service. You can get your tires repaired, balanced, rotated, and inflated all for free during the tire’s lifetime. America’s Tire offers the same program, but you don’t have to pay a membership fee.

Arguably, one of the most famous perks is the Costco food court. I’d be hard-pressed to find a quarter-pound-plus beef hot dog with a 20-ounce drink (plus refill) for $1.50 anywhere. Costco’s pizza – baked there – is also delicious and a steal for $1.99 a slice or $9.95 for a whole pizza, which you can order ahead and take home. They also serve sandwiches, salads, ice cream, gelato, and smoothies. Is it any wonder that Costco’s food court is always crowded?

Costco gas: my biggest pet peeve

insane line of cars at Costco's gas pump

Not all Costcos have their famous – or infamous, depending on your point of view – gas stations. Costco’s Kirkland Signature gas is top tier and is supposed to reduce emissions and keep your engine clean. 

With the current gas crisis in California, gas prices are skyrocketing upwards of $7 per gallon for premium. Personally I’ve seen it average between $5.15-$5.99 per gallon. Over at Costco, as of my writing this today, regular gas is $5.05 and premium is $5.35 – a significant savings, you might think.

The big problem with Costco gas is you need to spend at least 30 minutes in line waiting to fill up. I bought gas recently for $5.19 per gallon, and if I had bought it at Costco instead, I would have saved $2.38. Those small savings may be helpful if you’re watching your budget. But you’ll also need to consider how much time you’ll need to fill up and if that wait is worth it. I’ve tried going to Costco different times of day, but there’s always a long line.

Is Costco worth it for one person?

Goldstar Member Costco card

A Costco membership could have some cost savings for a single person over many months, but I think you should consider a few things before spending the $60 fee. 

First of all, take a good look at your living space. It may seem like you’ve scored the deal of the century by purchasing 30 rolls of toilet paper for 20 bucks. Sure, it could last you six or seven months, but if you live in a one-bedroom apartment, you’ll have to be pretty organized to find places to store all those rolls. 

Kirkland paper towels are a great buy – 12 rolls for $22 – but again, where will you put them? It seems overkill to me, and how much are you actually saving, when you can find deals for both in your local supermarket? 

Say, you do have the space, you should stick with the shelf-stable food items that you consume the most. They’ll have long expiration dates and are very unlikely to go bad. If your refrigerator has a decent size freezer, Costco has excellent frozen seafood in individually wrapped portions, which you could spread out over months.

Another option is buying Costco’s bulk meat, cutting them into portions, and freezing them yourself. Costco’s pharmacy area – adjacent to the pharmacy – has fantastic deals on toothpaste, vitamins, supplements, and beauty products, and stocking up on these could last you all year.

So, yes, I do think that a Costco membership would benefit a single person, but you have to be willing to plunk down a couple hundred dollars as an initial upfront cost. Costco will save you money, but only over time.

Is Costco worth it if shared between two people?

If you visit costo more than a couple times throughout the year, its highly likely the membership fee will be worth it for two people.

If you’re a single person, your best bet in getting the most out of a Costco membership is by sharing it with someone. You get two cards with the Gold Star and Executive memberships, so you don’t even need to go shopping at the same time. 

But you could also make it a joint venture: Buy in bulk and split your purchases. You’ll each just pay a $30 membership fee (for the Gold Star), and you’ll easily make that up with the savings of purchases you make together.

Who else typically benefits greatly from a Costco membership?

Costco shirts and baby

Costco is great for families, but it’s also fantastic if you frequently throw parties, particularly if you’re feeding a crowd. If you do entertain a lot, then it might be worth looking into the Executive membership and collecting your 2% Rewards.

I know caterers and private chefs who shop at Costco for groceries and catering supplies for large events, and I’m always seeing small business owners loading up pallets of food, supplies, water, and snacks for resale at their stores.

I’ve also found some great deals on clothes, shoes, kitchen supplies, and appliances. Costco sends out monthly coupons, and the markdowns are considerable. So if you’re setting up a new apartment or home, I recommend checking prices at Costco because many items will be less than at its big box stores.

For example, for a members-only deal, Costco marked down by $300 a Samsung laptop that was sold at competitor retailers for $1,299. 

Conclusion

If you’re just shopping for food at Costco, the savings aren’t as competitive for the same items you’d find elsewhere, so the $60 annual membership fee might not be worth it for you. But other in-store brands are really on par, quality-wise, as Costco’s Kirkland Signature brand. I prefer spending a few dollars more on Costco’s authentic olive oil than buying other white label brands that aren’t vetted.

If you look beyond food and liquor, then the savings you’ll get in practically everything else that’s sold at Costco far surpass the membership fee. The key to shopping at Costco is to know exactly what you want and/or need and resist the overwhelming impulse to toss stuff into your cart just because it’s so well-priced. 

Costco doesn’t price-match, so it’s a good idea to check out other retailers online and compare their prices for the same item you have your eye on. But many times – especially when Costco marks something down – I’ve made up my membership fee in one or two purchases. Plus, I get to indulge in a yummy Costco all-beef hot dog. 

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