The Biggest Perks of a Costco Membership

March 12, 2021

Anyone who has listened to the How To Money podcast for any length of time knows that I’m a pretty big Costco fan. And it’s not just because the Costco food court offers the cheapest lunch option in town. There are a lot of perks that make Costco membership a really worthwhile consideration. That $60 membership fee pales in comparison to the value that most folks will get by joining the ranks of millions of other Costco members. 

We debated some of the pros and cons of warehouse club membership back in this episode, but today I want to specifically look at the advantages you’ll get if you decide to become a Costco member. I’ve been a member since 2014 so I’ll give you the best insights I’ve gleaned over the prior seven years.

Baby essentials are great buys at Costco

If you are welcoming a baby into your home in the near future, a Costco membership is something you’ll want to consider shortly after you outfit your nursery. That’s because Kirkland Signature diapers and baby formula are incredible buys. In this phase of life, what you spend on infant products alone will more than make up for the membership fee you pay. 

Kirkland Signature diapers get great reviews and are priced well. But the infant formula is where Costco really sets itself apart. The price that you’ll pay in the store is roughly half of what you’ll pay for name-brand counterparts. And since babies suck down formula faster than Usain Bolt runs a 40-yard dash, that one item could tip the scales in favor of Costco membership for you.

Costco’s store brand items are often better than name-brand equivalents

At most retailers, When you buy a store-brand item, you expect to get something of lower quality. But at least you saved a few bucks, right!?

Well, most Costco members actually opt for Costco’s store brand items over the name brand counterparts. Kirkland Signature items are famous for high quality at reasonable prices. In fact, when Costco decides to launch a new Kirkland Signature item, the goal is to create something that is at least 1% better than a similar name-brand item.

From my experience, they accomplish this goal regularly. Whether it’s the Kirkland Signature diapers I mentioned before or Costco’s organic peanut butter, you’re bound to find quite a few items that you like more than the name brands you are used to. And you’ll save money at the same time.

Prescription drug prices are incredibly low at Costco 

Costco consistently offers some of the lowest prices on prescription medications, too. Perform a search on GoodRx for a medication you regularly take and you’ll likely see Costco offering a rock-bottom price – especially when compared to the major drug store chains. 

And the great thing is, you don’t even need to be a Costco member to take advantage of those prices. I know, we’re specifically talking about the perks of Costco membership, but I figured that people who aren’t interested in becoming a Costco member might also be interested to know how they can benefit from the warehouse club without forking over $60 a year.

It’s important to note that Costco doesn’t always have the lowest price on prescription meds. It’s still important to shop around.

Consumer Reports found that Costco is incredibly competitive and that filling prescriptions at your local Costco could save you hundreds of dollars a year. You could also save on medication for your pet! As the vice President of Pharmacy at Costco, says, “we just price products as low as we possibly can and still make a modest profit.” Those low prices get passed on to you!

Costco sells a ton of excellent wine at great prices

Matt and I are, of course, craft beer guys. But we won’t refuse the occasional glass of wine. Costco’s selection and pricing of wine are unbeatable – at least from what I hear from wine aficionados. is a great site where you can read independent reviews of many of the wines that Costco sells.

If you are borderline cheap, Costco sells a boxed Kirkland Signature Cabernet Sauvignon that costs $13. And although that is equivalent to the cost of a bottle of two-buck Chuck, the taste is far superior.

If your Costco has an attached liquor store you’ll be able to score deals on spirits too. You’ll find an excellent selection at prices far below what you would otherwise pay at your local bottle shop. And Costco even has a few tasty Kirkland Signature varieties that will save you even more. Some have speculated that Costco’s store-brand vodka is distilled and bottled by Grey Goose – but those rumors aren’t true as it turns out.

It’s also important to mention that many states have laws that prevent membership requirements to buy booze. So in most states, you’ll be able to purchase your bourbon or gin without becoming a Costco member. That’s another solid Costco perk available to the memberless among us!

Getting gas at Costco can save you meaningful money

Costco’s fuel prices are often $0.25 a gallon cheaper than other gas stations in the area. Sadly, my nearest Costco is 20 minutes away. I don’t drive much either as I prefer to bike whenever possible. My dad, on the other hand, drives a ton! He has to for work. And since he passes a Costco frequently, filling up there really leads to some serious savings.

And it’s not just that the gas at Costco is cheap, which it is. Costco is also a top-tier gas retailer, which means that the fuel you are putting in your vehicle is formulated to clean engine components and reduce harmful deposits and emissions. Top-tier gas is often more expensive, but AAA finds that it’s often worth it to spend more and put the best gas into your car. But at Costco, you get the best for less. That’s just how they roll.

Buying your tires from Costco can save you big money too

We just got done discussing the gas you put in your car. Now let’s talk about where the rubber meets the road – literally. The Costco Tire Center has deals that will snag you a new set of tires at a great price. If you buy a set of 4 tires you can save up to $150 off Costco’s normal low price – if you buy during a promotional period that is.

I purchased a set of Michelin tires from Costco a few years back during one of these sales. The manufacturer was offering a sweet discount and Costco threw in free installation. In addition to getting a great price on your tires, you’ll receive free inflation pressure checks, tire balancing, tire rotations, and flat repairs. 

Costco also fills your tires with nitrogen instead of compressed air which is better for the performance and life of those tires. All of those extras will save you meaningful money!

Costco’s return policy is unbeatable

Costco members can feel pretty confident when they spend money at the warehouse giant because the retailer offers top-tier customer service in addition to top-tier gasoline. 

Part of that robust customer service is a customer-centric return policy that stands out like a rose amongst thorns in the current retail environment. The risk-free 100% satisfaction guarantee is something that Costco takes seriously. And the lack of a limited return timeframe makes this return policy even more generous…and rare. 

Members know that they can return items that they no longer want or need without any hassle. There are a few items that Costco has limited to a 90-day return window. You can check out Costco’s website for specifics on its return policy and the items that you won’t be able to return after that 90 days have passed. 

Something else worth mentioning about Costco’s return policy is that you can cancel your membership at any time and for any reason and your membership fee will be refunded to you. Whether you decide that you hate shopping in a retail environment with concrete floors or if you just realize that the nearest Costco is a pain to get to, you can easily cancel your membership and get your money back. You can’t lose by giving Costco membership a shot!

Becoming an Executive member offers additional benefits

A regular Costco Gold Star membership comes with a $60 annual fee. And even though you can cancel your membership and get a full refund, it’s important to weigh the benefits before you make the commitment. But for many members, it makes sense to pay Costco even more money every year for membership! A $120 Executive membership makes the most sense for many Costco shoppers. 

That’s because Executive members get a 2% reward on all Costco purchases – up to $1,000 a year. This includes purchases you make when you book travel through Costco. A good rule of thumb is that if you typically spend $250 or more each month, or $3,000 a year, at Costco, the benefits of becoming an Executive member outweigh the additional membership cost.

Another benefit of Executive membership includes lower lender fees when you refinance your mortgage through Costco’s mortgage service program. Also, if you opt for an Executive membership and the rewards you receive don’t make up for the additional cost, Costco will make up that difference by giving you cash. 

Using Costco’s credit card leads to even greater rewards

If you’re a Costco shopper and you aren’t using the Costco Rewards credit card, what are you doing!? It’s the next credit card you should get. That’s because you’ll get an additional 2% cashback on every purchase that you make at Costco. 

On top of that, you’ll get 4% back on fuel that you purchase at gas stations, making those low Costco fuel prices even more enticing. 

The downsides of being a Costco member

Becoming a Costco member isn’t all rainbows and sunshine. Because Costco builds enormous stores, there aren’t all that many of them. You might not even live in the vicinity of a Costco! 

The act of finding a parking space at your local Costco can be nightmarish and the crowds can be overwhelming – especially on the weekends. 

People that live alone or families that live in tight living quarters might also find it more difficult to realize the benefits of a Costco membership. Buying in bulk brings down the cost, but it still costs you more if you can’t use all of what you bought! If it will take you years to use what you’ve bought or if you don’t have the ability to store the things you purchase at Costco, becoming a member doesn’t make much sense.

Additionally, Costco doesn’t offer rock-bottom prices. If you’re looking to get the absolute lowest price on everything you buy, you’ll want to shop elsewhere in many cases. Costco specializes in providing value, not dirt-cheap goods. 

Costco also only accepts Visa credit cards when you check out online or in a physical store. Most people should have a few credit cards in their possession and you likely have a Visa card if you do. But if you don’t, you’ll need to remedy that in order to even make a purchase.

Are the perks of Costco membership worth the price you pay? 

As you can probably tell, I like Costco. Our family gets quite a bit of use out of the perks that Costco membership offers. 

The things I listed in this article don’t even tell the full story of what you get when you become a Costco member. You’ll find all sorts of other perks of becoming a member if you give it a try – like the ability to buy discounted life insurance policies or get free technical support if you need troubleshooting help after purchasing electronics there.

If any of the above offerings resonate with you and there’s a Costco in your vicinity, it might make sense to purchase a membership and check out your local Costco before renouncing the idea altogether. Keep track of the savings you rack up throughout the year to see if that $60 or $120 membership fee is worth it. And if not, don’t hesitate to ask for a refund. 

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