Is a Costco Membership Really Worth It?

It’s common knowledge that buying in bulk can save you a ton of dough.

In fact, being unable to afford to stock up on discounted household must-haves is part of what keeps you broke.

But if you’re really strapped for cash, facing down the extra expense of a Costco membership can be daunting, even though it’s only a small amount in the long run.

And even if you can relatively easily afford it, that extra fifty bucks is still fifty bucks. It could buy a concert ticket, cover a date night or even pad your retirement account.

Do you really want to spend it on the mere right to walk through the doors of a warehouse store?

Is a Costco Membership Worth It?

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Whether or not Costco’s cover charge is worthwhile depends on your situation.

The money itself can mean more or less depending on how much of a stretch it is for your budget, of course… but that’s not the only factor.

To figure out whether paying the membership fee would be a savings or a needless splurge, you’ve got to examine your purchasing needs and behaviors — and match them up with the goods and services Costco has to offer.

How Much is a Costco Membership, and What Do You Get?

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So how serious is this barrier to entry, anyway?

Costco’s regular, entry-tier “gold star” membership costs $55 per year, and you can get additional cards for your spouse, domestic partner or “anyone over the age of 18 and living at the same address.” You’ll have access to any Costco location in the world.

The business membership is also $55 per year and allows the holder to purchase additional affiliate cardholder privileges for $55 apiece and purchase goods for resale prices.

Finally, the lofty executive membership costs double its counterparts, ringing in at $110 per year. However, you’ll get “additional benefits and greater discounts,” and also 2% cash back on your qualified Costco purchases.

That means you’d have to spend $2,750 over the course of a year to earn back your membership fee in cash-back rewards, which sounds like an awful lot…

… until you realize it’s only $230 per month, an amount even the thriftiest of us surpass in grocery purchases, according to the USDA.

And the terms promise Costco will refund you the full amount of your membership fee if you’re ever unsatisfied.

That’s a pretty solid gamble, I think. But is it really worth your time and effort to sign up?

Here’s what I found out about Costco’s best deals, and when it makes sense to join.

If You Have Kids

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If there’s anything you need lots and lots of as a parent, it’s diapers — unless you’re using cloth reusables, or even braving the world of no diapers at all.

Amazon has some good bulk options, with price-per-diaper dipping as low as $0.18. Costco’s tend to hover in the $0.19-$0.24 per diaper range.

As far as baby wipes go, Amazon and Costco are about on par with each other at about $0.02 per wipe — and both companies offer free shipping to those who pay their annual membership fees. (Reminder: That’s $99 for Prime after your 30-day free trial, as opposed to Costco’s $55.)

But if you’re shopping in person for food and other goods (like, uh, wine) in bulk, you’ll pay yourself back in diaper money at Costco faster than you can say “It’s your turn, honey.”

Plus, according to TPH’s People and Culture Manager Erin O’Neill, Costco’s baby wipes are “the world’s best.” And I believe it, too, since you can find Costco’s product listed on Amazon, where it presumably sells despite the additional expense it carries for a non-member purchasing it from a third party.

Another family-friendly savings nexus? Quick and easy prepared foods. Busy parents will love finding pre-packed, heat-and-eat rice and quinoa at a steep discount from grocery-store prices.

Oh, and don’t forget the free samples that’ll have your kids begging you to take them along when you go shopping. How’s that for a change of pace?

Verdict: Yes

If You’re Part of a Couple

Orin Zebest under Creative Commons

While a warehouse membership is almost a no-brainer for families, it’s a bit more of a stretch for a child-free couple. Do you really go through that much stuff?

But when writer Abigail Murrish finally took the leap and bought a membership, she used these seven simple tricks — and saved a ton of cash.

One of my favorites? Split your purchases with another couple.

Although Costco only allows the actual cardholder to make purchases, you can easily split the bill afterward and have your friends reimburse you in cash.

So, you’ll get to take advantage of Costco’s awesome deals without contributing to America’s massive problem with food waste. Heck yes!

VERDICT: Probably!

If You Take Expensive Medication

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“My yearly membership is paid off with just one purchase,” writes reddit user mokvendry.

“Generic, over-the-counter medications are absurdly cheap at Costco — I can buy a year’s worth of generic Zyrtec and it’s more than $55 cheaper than the equivalent generic from CVS or Walgreens.”

“The rest,” the user adds, “is gravy.”

That said, you can actually access Costco’s pharmacy without a membership — your right to do so is protected by state law. You can also get low-cost immunizations and eye exams membership-free!

But for over-the-counter stuff like antacids, you’ll have to buy a membership. If you go through a lot of a particular OTC medication, it’ll probably pay for itself in no time.

Verdict: Yes, if it’s over-the-counter

If You Buy Organic

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Annemarie Rossi of Real Food Real Deals is “tired of feeding [her] family processed food,” and insists on buying the very best grass-fed, organic and natural whole foods available.

So she crunched the numbers to find out how much she could save on the healthy products she buys for her family of four… and the results were pretty eye-opening.

According to Rossi’s comparisons and calculations — which took budget-friendly grocer Trader Joe’s into account — her family would save upwards of $1,300 by purchasing their organic milk, eggs, chicken, diced tomatoes and other goods at Costco.

That figure makes $55 look pretty darn insignificant.

Father and blogger Marcus Kusi had a similar revelation when he purchased a Costco membership for his family of four. He’d been afraid their organic lifestyle would make the membership a waste.

“We were pleasantly surprised at how much organic food and produce Costco offers,” he told me in an email — and at much better prices than traditional grocery stores.

“It saves us a lot of money and makes Costco a weekly stop for us.”

That said, if your local Costco is a bit far away and you think you’ll need to re-up on produce more often than you can get there, you may end up just running out to your local store, counteracting some of your membership’s ROI.

Verdict: Yes, if you do all your grocery shopping at Costco

If You Live By Yourself

Orin Zebest under Creative Commons

This one’s tricky.

Some things are worth buying in bulk because they never go bad and you can never have too much (read: toilet paper).

But as a singleton living in a tiny apartment, even paper products are difficult for me to buy in bulk — let alone perishables like fresh produce. I simply don’t have the square footage to devote to storing it.

I’ve still considered joining, though, and if my apartment was just a little bit more spacious (and maybe 10 minutes closer to my local Costco), I probably would.

Why, you ask?

Well, aside from the obvious benefits of buying paper products and non-perishables in bulk, I’m also drawn to Costco’s store policies.

Costco’s return policy is the stuff of legend, and it’s a big enough perk on its own to earn the loyal patronage of Mark Kantrowitz, the publisher and vice president of strategy for Cappex.com, a college comparison tool.

“The Costco refund policy on its own makes the membership worthwhile,” says Kantrowitz, who once successfully returned an item a full year after its purchase date. “They stand behind the products they sell.”

And Costco’s conscientiousness isn’t just directed toward its paying customers. The chain offers its employees generous wages, even at the entry level.

It’s nice to know the money I’d save at Costco doesn’t contribute to the company cutting corners or minimizing paychecks.

Verdict: Maybe

If You REALLY Like Wine

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OK, here’s the real reason I’m thinking about joining.

One thing I bet you didn’t know about Costco: It’s the largest wine retailer in the U.S., even in the case of fancy French imports.

And having spent many a hoarded penny on wine, I can confirm Costco’s got some very competitive prices.

That said, you might not have to spring for the membership to get in on that sweet, cheap vino.

Just like the pharmacy, some state laws protect your right to purchase alcohol at Costco without a membership.

While it’s technically to do with post-prohibition-era laws pointed at speakeasies, I like to think it’s because the government recognizes that wine is medicine, too.

California makes the list, as do Arizona, Connecticut, Delaware, Hawaii, Indiana, Massachusetts, Michigan, Minnesota, New York and Texas, according to Consumerist.

But be aware: Store employees might not know about this subtle rule, and you’ll probably have to get a manager involved.

However, if you’re stuck — like I am — in a state that hasn’t written the healing powers of pinot noir into law, that membership fee will pay for itself in a month or two, tops.

Verdict: Yes, unless your state is magical

If You Have a Dog

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Trust this greyhound mom when she tells you: Dog food can become a serious expense.

Stocking up on high-quality kibble is part of what convinced this writer to take the plunge and buy a membership — even though she was only buying for two humans and a dog.

But a Costco membership can come in even handier if you’re as serious about your pets’ nutrition as your own.

Kimberly Gauthier feeds her four dogs a raw diet — which means she buys a lot of meat.

“A Costco membership makes this affordable,” she writes. She needed an extra freezer to store it all, and she bought that at Costco, too!

She also mentioned Costco’s dog beds are some of the best-priced and highest-quality on the market. She’d know — she’s the mind behind Keep the Tail Wagging, a blog all about dog nutrition and care.

Verdict: Most likely

If You Drive a Lot — or at All

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One of the best deals at Costco probably isn’t on your grocery list.

“While there are a number of items that help us make our membership worthwhile, there’s one that stands out,” writes Mark Aselstine of Uncorked Ventures.

“Gasoline!”

Yup: Costco’s got some of the most affordable gas around, and you can’t purchase it without a membership (unless you’ve got a Costco cash card — which only members can purchase).

Almost all of us use at least some gas, so this discount will probably help you, unless your Costco’s location is super inconvenient.

But if you have a long commute or otherwise put serious wear-and-tear on your vehicle, a Costco membership might pay for itself a lot more quickly.

That’s because Costco routinely offers up to $80 off certain brands of tires, according to frugal living blog Save Outside the Box — a savings that instantly makes up for your fee. You’ll even get free tire balancing and rotations to boot.

Verdict: Yes, especially if you have a long commute!

So: Should You Get a Costco Membership?

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Only you can decide if a Costco membership is right for your family and finances — but hopefully, we’ve given you some food for thought to help you consider all the ways Costco might help you save money.

Before you go for that membership, you should also know Costco might not be the least expensive warehouse store.

And despite your best intentions, if it’s too far away, you might never use your membership. In that case, you’re better off sticking to the stores in your area — even if they’re pricier.

One great way to consistently save money on your grocery shopping is to do a supermarket price comparison. We even made a handy worksheet to help you get started!

But if you do spring for Costco’s cover charge, you can strategize to get the most mileage out of your membership.

Don’t forget to take advantage of all the discounts you’re offered — even really weird ones!

Also, just like at any other store, beware of impulse buys or great deals on stuff you won’t actually use. Just because something’s cheap — or even free — doesn’t mean you need to get it. It’s still a waste of money if it ends up in the trash.

Happy shopping! And pick me up a hot dog while you’re there, OK?

Your Turn: Do you have a Costco membership? If so, do you think it’s worth it?

Disclosure: Here’s a toast to the affiliate links in this post. May we all be just a little richer today.

Jamie Cattanach is a staff writer at The Penny Hoarder. Her writing has also been featured at The Write Life, Word Riot, Nashville Review and elsewhere. Find @JamieCattanach on Twitter to wave hello.

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