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Costco Membership Fees to Increase on June 1st

Attention Costco members: Your next renewal will be $5 to $10 more expensive.

Update March 3, 2017: Costco has announced a $5 increase for its individual, business, and business add-on annual memberships, effective June 1st, 2017. Executive memberships will also increase from $110 to $120. 

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Retail experts are buzzing about a likely increase in Costco's annual membership fees, which could be announced as early as tomorrow. Rumor has it that a 10-percent hike is on the way, meaning the basic Gold Star Membership increases from $55 to $60 per year; their Executive Membership is expected to jump from $110 to $120 per year.

The prediction, which comes from UBS analyst Michael Lasser, stems from Costco's own pricing pattern — the company tends to raise their membership fees every five to six years. Since the last increase was in late 2011, the timing seems about right.

The big-box giant has yet to confirm or deny the rumors, although, according to a recent Yahoo Finance report, Costco's CFO hinted at potential fee increases during a December earnings call. UBS says that clarification will likely come when Costco announces their second-quarter earnings on Thursday, March 2nd. Until then, we'll be waiting.

I've been shelling out the Gold Star Membership fee for the better part of a decade. These days, we save over $650 per year buying in bulk at Costco, so having to cough up an extra five bucks doesn't bother me in the slightest; for our family, the savings outweigh the minimal cost. Still, it's a reasonable assumption that Costco will benefit big time.

According to CNBC, roughly 75 percent of Costco's profit comes from their membership fees. Translation: increasing the annual price tag, even as little as $5 to $10, is a slam dunk for shareholders. But it also might be a serious irritant to loyal customers, especially those who are already paying over $100 per year for an Executive Membership. The only thing that may soften the blow is that this top-tier membership comes with an annual reward certificate equal to 2 percent back on your purchases for the year.

For us Gold Star members, Yahoo Finance reports that we can break even on the $5 price increase if we spend $500 per year using Citi's Costco Anywhere Visa Card. The card gives 2 percent cash back on all Costco purchases, which would essentially negate the price increase. The card also comes with cash-back opportunities at gas stations, restaurants and more. Our family would hit that $500 spending mark within the first few months, but I personally would rather spend an extra $5 than open another line of credit. (We're uber-cautious about accruing debt.)

We'll see if Thursday indeed brings news of Costco membership fee hikes. If so, will you grit your teeth and pay up? Or say so long to your member card?



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Marianne Hayes Contributor

Marianne Hayes is a freelance writer, wife and mother in Tampa Bay. After earning a degree in journalism and creative writing from the University of Central Florida, she spent nearly a decade getting lost in New York City and Los Angeles before making her way back home again in 2014. Marianne's writing has appeared in a variety of publications including The Huffington Post, Forbes.com, LearnVest, The Daily Beast and more. When she's not writing, Marianne is usually cruising her local bookstore with her two daughters.

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#2
This will just make me even less likely to get my own card and even more likely to continue to just shop with a relative who is a member, especially since I only shop at Costco a few times a year.
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#3
If your family is spending $500 within a few months at Costco, why in the world are you a gold member? It would only take $3000 in annual purchases with an executive membership to net cash back equivalent to the price difference between the two membership levels at the new price. Everything beyond that would be saving in membership costs.
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#4
My wife gets the executive membership every year. While Costco does have a few good deals, Amazon is nipping away at their heels with Prime Pantry. I get far more bang for my $100 from Amazon Prime than I do from Costco.
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#5
"For us gold star members" ..step your game up.
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#6
Costco not only saves me a significant amount of money, but they generally do not stock crap products. Trust is hard to come by in retail, and they've earned mine. Another $5 or 10 is well worth it
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#7
The last few big electronic purchases I've made (printer, blu ray player, etc), Costco has been on par or even cheaper, than amazon. So I'd rather just get it at Costco since they treat their employees well and are a great company. $5 every five years or so isn't a big deal; just skip a lunch out somewhere else and get a hot dog and drink combo, and you have your $5 already.
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#8
If not for their lower prices in gas, I would have been long gone from Costco. I buy more from Amazon, Target and Ralph's much more than from Costco. I will keep my executive membership but if my reward check from Costco don't cover, I will just go back to them for the difference. Kinda sucks that Costco raises membership fees because they couldn't beat their earnings estimate. Guess we all still paying for them Wallstreet crooks...
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Last edited by Schooby March 3, 2017 at 01:21 PM.
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#10
every time i've went into a costco over the years to compare prices for the things I buy weekly, sam's has always been lower (in my neck of the woods at least).
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#11
Can't justify the Executive membership for renewal, now need to spend $3k/yr just to break even and with Amazon I've found I spend less at Costco now. Might be interesting to see if others are like me and follow suit. Could be interesting if instead of a $10 increase/member for Executive level they see a shift in memberships and drop $50/member.
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#12
I am ok with it. I usually get much higher rebates back, than my fees for annual membership for executive membership.
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#13
With the increase they should get the "Welcome to Costco, I love you" guy to greet you at the door.
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#14
I don't mind the extra cost. We tend to shop their a lot. We like their products, service and generous return policy. When the day comes those start failing, I won't be renewing. Keep up the good work costco!
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Quote from hn333
:
With the increase they should get the "Welcome to Costco, I love you" guy to greet you at the door.
More useful than the person they have standing at the exit who checks your receipt. Never understood the purpose of that function, seems like a waste of $$
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