Costco, the membership-based warehouse retailer, has raised its membership fees for the first time in seven years. The action, effective September 1, 2024, hit millions of members across the United States and Canada. Now, let’s consider the new prices and what it really means for Costco shoppers.
New membership rates
Beginning on September 1, 2024, the Costco membership fees changed accordingly:
- Gold star membership: Previously at $60, it increased by $5 to $65 as of September.
- Business membership: Just like the Gold Star, so too the Business Membership increased from $60 to $65, mirroring the same $5 increase therein.
- Business add-on membership: This, too, saw the same change of rate from $60 to $65.
- Executive membership: A bigger hike was seen in the executive membership which went from $120 annually to $130, a total increase of $10. With that comes increased benefits for the executive members, such as an increased reward cap.
Increased executive membership rewards
Along with increasing the membership fee, Costco has also gone ahead to increase the annual 2% reward cap for Executive Members to $1,250 from $1,000. That means while members will be paying more up front, they have the opportunity to earn greater rewards on their purchases, which helps them offset the increase in membership cost.
Rationale for the increase
Costco explained that the adjustment of membership fees became inevitable, as it tries to balance out an increase in operating costs with maintaining the value proposition for its members. The move is the first adjustment Costco has made in its membership fees since 2017, amid rising inflation and other pressures in the economy. With approximately 52 million memberships affected by this increase, such a decision shows Costco’s sustainability strategy while continuing to sell its products at low prices.
Member reactions
The reaction of Costco members to the rise in fees has been pretty mute. Many members have expressed understanding and sentiments of support for the move, citing that the increase is modest, considering the time it has taken to adjust. Comments on social media platforms like Reddit show how such members find the increase in fees reasonable, with Costco still offering value-for-money with membership costs.
Implications to new and old members
- New members: Those applying for a Costco membership on or after September 1 will fall under the new fee schedule.
- Old members: The current members will be charged the new rates upon renewal, which will commence mid-July when their memberships expire in September or beyond. Members who have auto-renewals will also be billed with the new automatic rates.
This is a huge leap for the retailer, considering that it hasn’t raised Costco membership fees for seven years. Although most of them may not welcome these changes, probably increased benefits and continued commitment to low-priced products would lessen the annoyance of any members.
