Everything You Need to Know about Costco Membership Discounts

Costco is one of the most successful bulk product wholesale stores in the world. When you need to save money, and often you can save a lot of it, chances are there is a Costco store near you. But unlike Walmart you can’t just walk in and take advantage of their everyday low prices. You are required to acquire a paid membership and show your Costco membership card before the discounts apply. There is at least one exception to this rule, which we will discuss later. For now, keep reading and start to explore everything you need to know about membership and start taking advantage of those Costco membership discounts.

There are literally hundreds of Costco warehouse centers around the world, which is an apt description of the store. Your membership gains you access any of those stores where you will find both specialty areas and discounts aimed directly at the Costco card holder. One of the unique features of being a Costco member is that not only are the items that you buy come with a 100 percent satisfaction guarantee, but your paid membership does as well. Think of it as getting a refund on a credit card that has an annual fee when the card is not everything it advertises itself to be.

The history of Costco initially targeted two major groups of people – small businesses and a select group of non-business people who would normally buy large quantities of items and benefit from warehouse-type discounts. Today you find there are two groups of card carriers – Gold Star and Business. There is also an Executive Membership plan available, one that you can qualify for after being a customer for six months and meeting other requirements. It has additional membership services and a 2% discount that goes with it, so if you like your initial experiences with Costco you will want to look into it.

Both the Gold Star and Business memberships will charge you $60 as an annual fee. This may sound a bit on the pricey side, but if you divide it by 12 months you get complete access to all Gold Star benefits and services for just $5 a month. If you spend and save just $6 each month you are already ahead $12 for the year. However, Costco is so confident you will love their discounts that they can literally afford to offer you that 100 percent membership refund.

Once you receive your card and plan to start shopping, you need to know that web sites such as Living Social, Deal News, and Groupon often have membership specials that add to your savings even more. These web sites will occasionally offer Costco membership packages, such as the annual Gold Star membership, a $20 Costco Cash Card, and $65 in coupons for a total price of $60.  You will want to bookmark these websites and return to them throughout the year to keep up on additional discounts you can combine with your Costco membership. Also, if you fall into a specific customer category such as being a student or teacher, there are discounts available for you too.

One question many people ask is whether there is an online shopping website that allows you to simply shop online. The answer is yes, but there are a couple of conditions attached to it. The first is that everything that is available at the brick and mortar Costco store will likely not be available online. If you are someone who regularly shops online and finds everything they need without visiting the store, this is a great alternative. However, the second condition will definitely affect your shopping experience. Costco charges an average of 5% more for items purchased online. That $100 pack of cereal will cost you $105 at checkout. How you can take advantage of this extra charge (it is possible!) is to calculate how much it costs you to go round trip to your nearest Costco. You may find that shopping online is not only easier, but cheaper! Products that are fresh such as fruits and vegetables cannot be ordered online.

Here is a little known way to actually save money on your membership while sharing your good fortune. Costco allows you to share your annual fee with a friend or family member. So instead of spending $60 a year you can reduce that to $30 and you and the other person will both have access to the benefits and services offered. This strategy also means that instead of having to spend $5 a month to break even, you only have to spend $2.50 a month. Even if you are on a tight budget, this is very doable. The limitation is that you can designate only one other person to split the annual fee with.

Another way to take advantage of Costco services is to stop in at a store, even if you don’t have a membership card, and sit down at their Food Court to grab a bite to eat. There are also vision and hearing screenings waiting for everyone, membership or not. If you like some of what you see, ask your card carrying Costco friend to get a Costco Cash Card for you. The cash card allows you to shop throughout the store and online without a membership. The 5% additional cost applies to all online purchases, just like with a regular Gold Star membership.

It is possible, but not recommended, that you can bypass becoming a member altogether by using the Instacart delivery service. The first problem with this option is you will be charged a delivery fee with your order. The second and larger problem is that you will have to spend a minimum of $35 to have the products delivered to your door. Surveys show that people tend to spend more when facing a minimum charge than if they were to shop directly at the store. You may be the exception to the rule, but it just seems easier to buy the membership and not worry about these complications.

Here is a useful detail to know about shopping in-store at a Costco warehouse. If you see a price that ends with 97 cents, it is a sign that says the item is being sold below cost. Now the second useful detail can save you even more money. If you see a sign that has an asterisk (*) next to the price it means that the store will no longer be selling that item. These products will have a lower price, and if you notice an item that has an asterisk wait for the 97 cent detail to appear and you can stock up on a product and get a really low price for it. When you think about it, this type of thing makes shopping a real experience for dedicated savers.

Being a dedicated Costco shopper has even more perks. An unwritten rule is to keep those Costco receipts for at least 30 days. Why? Because if you notice that a product you bought is cheaper 29 days later (and you know that happens a lot wherever you shop) just bring your receipt and Costco will give you the difference back in cash. In case you are wondering, it is true this is a way Costco gets you to be a regular shopper, but if you are a regular shopper anyway, who cares? Because Costco is a bulk warehouse store, changes in prices usually mean saving more than a few cents. You may run into a situation where you will not be offered their “price difference refund” so if it is something that can be returned all you have to do is return it and buy it at the lower price. But hopefully you will not have to deal with that.

Speaking of returns, you can shop at Costco knowing that you can return most unused purchases at your convenience. One exception is anything you buy from the electronics sections, which is limited to a 90 day return window. When you compare this return policy you will be hard pressed to find a better option.

If you shop at Costco using a credit card instead of cash, you may encounter a problem if you use anything other than a VISA brand card. Shopping at the brick and mortar stores requires you to have cash or a VISA card. A likely reason (though not the official one) is that the company gets charged each time a credit card is used. (This is why you don’t see American Express cards commonly accepted everywhere you shop.) Apparently VISA offers Costco the lowest fee per transaction, which allows them to lower their prices and pass the savings along to you. There always seems to be an exception with Costco, and here it is a positive one! If you shop online at Costco you can use any credit card to pay for your purchases. This creates yet another shopping strategy that can take the pressure off of your monthly budget.

Here is a note for people who prefer to use bottled water over their local tap water. How would you like to pay less than 1 cent per ounce for bottled water and get the same quality as most of the other brands? Costco’s Kirkland Signature brand water has been rated just as good as what you are likely to pay twice as much for, when you buy it in their 40 pack packages. The fact is, the average family will go through a 40 pack in less than a week, so what you buy will likely be used up sooner than later.

After reading all the perks and benefits that are available (we didn’t mention the discount pharmacy, but yes, they have one) you should be in a position to begin seriously considering moving up to their Executive Membership level. It is available for both Gold Star and Business accounts. The first thing you need to know is the price of the Executive level will cost you $120 a year, twice that of a standard membership. The Costco website suggests you call their toll free number, 1-800-774-2678 for complete information on the Executive level option.

The biggest controversy about spending the extra $60 is the 2 percent discount offered with the Executive card. The company’s own website says you need to spend a minimum of $3000 a year to get that extra $60 back in cash by using the card. It is after reaching this minimum amount of spending when the actual cash benefits begin to accrue. That’s an average of $250 a month, which is easily within reach of the average family’s monthly budget. The cash back perk is available up to a maximum of $1000 a year, which is reset when you renew your Executive level membership.

This article has been primarily focused on the individual Gold Star customer, and there is a substantial number of benefits attached to the $60 a year fee. Costco’s original target, the small business owner, will need to evaluate their annual expenses to determine whether Costco makes sense for their specific situation. Sole proprietorships usually have the option of choosing to put the account under the company name or their own name.

Knowing the basics along with the tips and tricks that, when used smartly, can add up to hundreds of dollars in savings throughout the year, gives the Gold Star membership even more value. Online or in-store, it will take you a while to realize the full value of your membership. Just remember to ask questions by calling their customer service number, and after some shopping experience you can decide whether you want cancel your membership for a full refund, stay put with your Gold Star status, or spend the extra $60 a year to maximize your Costco membership privileges.