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

12 thoughts on “Why I Canceled My Costco Executive Membership After Just 2 Days”

  1. Great article. Love your analysis and especially when you noted “It could lead to even more overspending and unnecessary purchases.” I’ve done that in the past trying to make the upgrade worth it. Great call to cancel it!

    Reply
  2. Right! Its especially a lot to just break even. I need to write an article on why I uber during the week and rent a car on weekends instead of owning my own vehicle.

    Reply
  3. I just cancelled my Costco membership because of the constant harassment upgrade. I’ve actually already been executive and downgraded because it wasn’t worth it and they still harass. I noticed that they have turned off their email support, locked down their Twitter account , and made it so that you cannot post on their Facebook page.🙄 sounds like they have some serious customer service issues.

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    • They harassed me at the checkout and I gave in and got the executive a couple months ago. We did end up spending over the breakeven amount last year, so we’ll see how it goes this year.

      Reply
    • Yeah that return policy sucks. My husband bought a traeger grill there. The sales man from the company told him that he would have a lifetime warranty through Costco’s return policy. Well when the pellet hopper broke Costco told us it was Up to Traeger for the warranty. Meanwhile Traeger insisted that it was Costco who was in charge of warranty. Now we are out $700 or whatever.

      Reply
  4. I agree with you, they also harassed me at the check out. I gave in once. I later canceled it and they gave me a hard time. They told me only the primary card holder can cancel the upgrade. They did not
    Tell me that when they want my upgraded.

    Reply
  5. Wrong, you can use the card anywhere. The charges add up from charges in and out of Costco. That make a big difference in the original statements.

    Reply
  6. The thing u dnt know is at the of the year if u do not break even costco will match deficit. U have to go to customer service for that

    Reply

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