Costco Executive Membership - NOT Worth It
Our Costco Executive Member rebate check arrived this week. $51 and change. Woohoo, free money, amiright? Well, no, it's not free money. It's possibly even a loss.
At the start of 2022 Hawk and I decided to upgrade our Costco membership to Executive. For an extra $60/year the primary benefit is 2% back on all purchases made at the store (except gasoline) and online.
As I explained in January, the math on whether this premium is worth it is simple: If we spend over $3,000 in a year our 2% rebate tops the $60 fee increase. We figured based on our shopping patterns since the start of the pandemic (we're buying a lot more groceries instead of dining out) we'd pass the $3,000 mark easily.
So, we fell short of the breakeven point, $51 vs. $60. Does that mean executive membership isn't worth it?
It's not quite as simple as, "$51 < $60 therefore fail." There are a few other factors to consider.
- Costco calculates rebate checks about 2 months before renewal. Since this is our first year of executive membership, the $51 amount represents only about 10 months of spending. Annualizing the amount puts us right near the $60 breakeven point.
- Costco Executive Membership includes access to a host of sales and discounts. During the year I found I never used them. Costco fans I checked with for a second opinion agree that these are deep in the category of YMMV. The 2% rebate is the main thing.
- People talk about the value of the 2% rebate when making a major purchase: computers, TVs, appliances, furniture. We don't anticipate making any such major purchases. Costco don't offer good deals on the computers or phones we want. It's possible we'll buy TV in the next year, if our current one dies, but we'd likely buy a sub-$500 model, not one of the latest-greatest $2,000+ models.
On the whole I don't see us getting very far past the $60 breakeven point this year or in subsequent years. For a scheme like this, where you pay up cash front and try to earn the benefits over the next 12 months, I want to see at least a 20% win. Breakeven is not enough.
We'll downgrade to general membership next time we're at Costco.
Update: after a few big shopping trips in January we decided we're beating the $60 cost by enough of a margin to keep the Executive membership for another year. We'll reevaluate in 12 months.
At the start of 2022 Hawk and I decided to upgrade our Costco membership to Executive. For an extra $60/year the primary benefit is 2% back on all purchases made at the store (except gasoline) and online.
As I explained in January, the math on whether this premium is worth it is simple: If we spend over $3,000 in a year our 2% rebate tops the $60 fee increase. We figured based on our shopping patterns since the start of the pandemic (we're buying a lot more groceries instead of dining out) we'd pass the $3,000 mark easily.
So, we fell short of the breakeven point, $51 vs. $60. Does that mean executive membership isn't worth it?
It's not quite as simple as, "$51 < $60 therefore fail." There are a few other factors to consider.
- Costco calculates rebate checks about 2 months before renewal. Since this is our first year of executive membership, the $51 amount represents only about 10 months of spending. Annualizing the amount puts us right near the $60 breakeven point.
- Costco Executive Membership includes access to a host of sales and discounts. During the year I found I never used them. Costco fans I checked with for a second opinion agree that these are deep in the category of YMMV. The 2% rebate is the main thing.
- People talk about the value of the 2% rebate when making a major purchase: computers, TVs, appliances, furniture. We don't anticipate making any such major purchases. Costco don't offer good deals on the computers or phones we want. It's possible we'll buy TV in the next year, if our current one dies, but we'd likely buy a sub-$500 model, not one of the latest-greatest $2,000+ models.
On the whole I don't see us getting very far past the $60 breakeven point this year or in subsequent years. For a scheme like this, where you pay up cash front and try to earn the benefits over the next 12 months, I want to see at least a 20% win. Breakeven is not enough.
We'll downgrade to general membership next time we're at Costco.
Update: after a few big shopping trips in January we decided we're beating the $60 cost by enough of a margin to keep the Executive membership for another year. We'll reevaluate in 12 months.