Why I Canceled My Costco Executive Membership After Just 2 Days

Why I Canceled My Costco Executive Membership After Just 2 Days

A few days ago, I was at Costco with my wife and my son. We were on our way to have a play date for our son and decided to pick up some fruit for our friends’ parents. We picked up some Cara Cara oranges and blueberries. As the cashier was about to finish ringing us up, another Costco employee quickly asked us if we wanted to upgrade to the Executive Membership. “It’s worth it! It will save you a lot of money,” she said. I knew the Executive Membership gives you 2% back in the form of a rebate each year. For some reason, I figured they were reviewing customers’ spend totals from the previous year and were offering upgrades to those who would benefit, so I impulsively agreed. I was charged an additional $55 (it’s $60 for the upgrade, but they prorate you depending on when you renew), and I now had the Executive Membership.

We walked out, and I immediately started thinking about whether it was actually worth it. Mrs. FrugaLee didn’t think it was worth it. I should have listened to her. Luckily, Costco has a fantastic return policy on their products and their memberships. I returned just 2 days later and got a full refund for the Executive Membership.

In the end, it wasn’t a difficult decision to make. Here’s the analysis I went through:

  • What is the breakeven point? How much do we have to spend each year at Costco just to break even? Costco recently increased the price of their regular membership fee to $60 annually (from $55), and $120 for the Executive (from $110). So, I’m paying an additional $60 to get 2% back. That means I need to commit to spending $3,000/yr just to break even. That’s $250/month or almost $60/week. I took a look at my past 3 months of Costco transactions. Even though we typically spent over $100/month at Costco, we didn’t spend over $250/month. This made it an easy decision.
  • It could lead to even more overspending and unnecessary purchases. It’s fun to go to Costco. In addition to the free samples, I enjoy seeing what new products they decided to pick up and what they put a rebate on. The only problem is, it’s not uncommon to go in there planning on buying a couple items and walking out spending well over $100 thinking you got such a great deal on all this great stuff. The Executive membership would provide even more motivation to spend just a little more because I’m getting 2% back.

Related: The Costco Effect: Are You Really Saving Money at Costco?

  • I won’t use any of the other benefits. Did you know there were other benefits to the Executive membership? I sure didn’t until I started researching for this post. Here they are: greater discounts on Costco Services, such as lower prices on check printing and identity protection, and free roadside assistance for vehicles covered through the auto insurance program. I don’t think I’d ever use of any of these, so it provides no value to me.

Two days after I purchased the Executive membership, I walked back into Costco and asked for a refund. They asked me, “Are you sure?”, but didn’t give me a hard time when I declined.

In the end, I didn’t want to commit to an average spend of $250+/month at Costco. I really like the quality of their products, the low prices, and the satisfaction guarantee, but this was a simple mathematical decision. It might be different for you, especially if you have a large family. This was simply my personal experience.

Photo source: Costco Insider

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