Is the Costco Executive Membership worth it?

About six or seven years ago, a new Costco opened just down the road from us. We had never been a Costco member before but heard many positive comments on their warehouses. We decided to join but immediately we had a question.

Membership Options

The question myself and many others have when first visiting a Costco is what membership should you choose? You have two options when joining, Gold and Executive. Gold membership is $60 per year and Executive membership is $120. What is different between the two options?

Executive Membership

With both membership options you get access to all warehouses locations. On the membership page, there are two additional benefits listed with the Executive membership.

  1. An annual 2% reward on eligible Costco and Costco Travel purchases. Up to $1,000 per year.
  2. Extra benefits on select Costco Services.

Cost Benefit Analysis

Let’s start with benefit number two from above. The “extra” benefits on select Costco services. The only information I could find on the Costco website was “lower prices on check printing and identity protection, and free roadside assistance for vehicles covered through the auto insurance program”. For many people, there is probably not a lot of value to that benefit.

Benefit number one is where most people will find the value proposition for the Executive membership. There is a handy table on the Costco website that shows you some sample values of what you need to spend to both break even and max out the reward. You can see that table below.

As you can see in the above table, you’ll need to spend $3,000 to break even for the Executive membership. That averages out to $250 a month. Because we have small children, we easily spend more than that per month. For our family, the Executive membership is worth it.

What We Buy

Here is a straight from memory list of things we buy from Costco on a regular basis, in no particular order: Fruit, meat, diapers, baby wipes, baby formula, almond butter, olive oil, milk, LED light bulbs, bagels, sandwich bread, yogurt, hummus, eggs, iTunes gift cards, kids clothing, kids toys, pasta, vegetables, sunscreen, rotisserie chicken, paper towels, toilet paper, juice, seafood, chips, vitamins, kids medicine, granola bars, dried fruit and nuts, and cereal. I know there is more, but that’s what I could think of in about two minutes.

Ways To “Spend” More

I put the word spend in quotation marks for a reason. There are a few different ways to increase your Costco spending that may not actually lead you to spend more money. Increased spending gets you a bigger reward check. Here are a few examples:

  • Pay for your iTunes/App Store purchases with iTunes gift cards. You can regularly get $100 worth of gift cards for $85.
  • If you eat out or go to the movies, you can find gift cards for sale at a discount.
  • Need tires or gas? Costco has them both (depending on the location).
  • Does a friend or family member need to make a large purchase like a laptop or TV? Buy it for them.
  • Check your local grocery store prices on things you regularly buy. You may be able to find it cheaper at Costco.
  • Their prescription drug prices are competitive (so I hear).
  • Do you have a big purchase of some kind coming up? Check Costco’s website and see if they have what you are looking for. The website has many items not carried in their warehouses.

Conclusion

If you know you’ll spend more than $250 a month, you should definitely get the Executive membership. Otherwise you’re leaving money on the table. Even if you don’t think you’ll meet the break even spending, there is one reason to try the Executive membership anyways. If you do not spend the necessary amount to break even, you can downgrade your membership to the Gold level and Costco will refund you the difference. You have nothing to lose!

What is your favorite thing to purchase at Costco? Leave a comment below.

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