On the March 2024 earnings call, now-former Costco CFO Richard Galanti said 46% of members were Executive members. They pay $60 extra for Costco's premium plan. That's a shocking amount of members choosing the most expensive Costco membership. What gives?
The real difference between the Costco Gold Star and Costco Executive is the 2% reward. Executive members get a once-a-year 2% reward on all the Costco purchases they've made that year, up to $1,000. It's a solid way to make the most of your Costco membership, though it's not for everyone.
Is Executive worth the 2% back?
To recoup the cost of your Executive upgrade, you only need to spend $250 per month at Costco. But to really reap the benefits, you want to spend upward of $10,000 per year. That way, you get back a couple hundred dollars, minimum, in Costco credit.
But hold up. The 2% discount comes with caveats. It's not like credit card rewards. You only get it as a once-per-year rewards certificate, and you need to redeem it in-person at Costco wholesale stores (at the register). You can't redeem it for cash or directly at Costco.com (but you can use it to buy a Costco Shop Card that you can use online).
You can totally combine the 2% back with a Costco credit card. But rewards are calculated separately.
How to make the most of Executive 2% back
A quick way to rack up rewards is to book travel through Costco. You can get good deals on flights, cars, and hotel stays through the travel portal.
Quick math: A single $5,000 trip could earn you $100 in Executive rewards. Plus, you can access Costco customer service if you have issues. A colleague of mine had a cruise trip get canceled, and she had Costco track down her refunds, so she didn't have to.
One hidden downside is Executive members don't get 2% back on gas. Costco gas stations are often a big part of your Costco spending. Costco gas is cheaper than competitors, and lines at the pumps move fast. Unfortunately, the 2% back doesn't apply here.
Another downside is you might be tempted to overspend at Costco. The logic is, you already paid for the premium membership -- might as well get the most out of it, right? While there is a point to be made here, it's easy to fall into the trap of overspending on stuff at Costco. Like, did I really need to buy 36 frozen salmon patties for myself, in one trip? No. No, I did not.
If this is you, you know the drill. The more excuses you give yourself to overspend, the more you'll overspend. A Costco Executive membership is no exception. If it becomes the thing that tips you from "good deal" into "why did I do that" territory, consider sticking with the Gold Star membership.
Executive vs. Gold Star membership perks
Executive members get 2% back in annual Costco credit and discounts on other services. Other than that, Executive and Gold Star members get the same perks.
Perks shared by all Costco members:
- Access to Costco warehouses and Costco.com
- Two membership cards per household
- 100% satisfaction guarantee
If you feel as if you're not getting your money's worth, you can call Costco and ask to have your membership refunded. Costco Reddit users say Costco actually follows through here. If you don't earn enough from an Executive membership and want to downgrade, you can, and Costco will even refund you the difference between the rewards you earned and the additional membership cost. If you only earned $40 in rewards, Costco will refund you the additional $20 to make you whole on the upgraded membership cost.
Costco has a stellar reputation for excellent customer service. Chances are, you'll get what you need from a membership at Costco. Do you spend $250 per month or more at Costco? If so, it may be worth splurging on an Executive membership. You could get your extra money back with your Costco spending.
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