Will Costco Increase Its Membership Fee? We will see

Many families rely on Costco and praise it for its cheap gas prices, discounted bulk products and $4.99 fried chicken. However, to get all the benefits of Costco, you need a paid Costco membership. The lowest fee is currently $60 per year. But will Costco increase its membership fee in 2023?

Many people want to know if Costco membership is worth it? As long as the savings outweigh the annual fee, it’s probably worth paying, but it depends on how you would use a Costco membership and whether you can find equivalent savings elsewhere. However, there have been hints from the corporate level that fees could soon increase.

The cost of joining Costco comes with the benefit of being able to shop at any Costco warehouse (or online) and getting the lowest prices on everything. Although it is possible to shop online without a Costco membership, there is an additional cost. So to really get Costco perks, you have to pay the fee.

Costco currently has two main membership tiers: Gold Star Membership and Executive Gold Star Membership. Gold Star is the basic tier and costs $60 per year to get all of Costco’s lowest prices. Upgrading to Executive Membership doubles the cost at $120 per year, but with additional perks.

With an Executive Membership, members receive 2 percent cashback on their Costco purchases up to $1,000. Even Costco Travel is included in the award category, which can add up quickly for Executive members.

According to GoBankingRates, Costco’s membership dues could increase sometime in 2023. The company’s CFO, Richard Galanti, hinted very clearly in a recent earnings call that price increases for Costco memberships were coming, and soon. “It’s a question of when, not if,” Galanti noted.

Although a price hike might cause members concern, keep in mind that Costco last increased its membership fees in June 2017. Galanti has mentioned that there’s been an average of about 5 years and 7 months between price hikes since then, which would put Costco on track to raise prices in early 2023.

Given that Costco has a very loyal customer base, with a 92.5 percent renewal rate in the U.S., management can be reasonably confident that a modest price increase won’t deter customers. Galanti explained that an increase in membership fees could bring in revenue that could help the company keep prices down despite inflation.

Just as the company’s CFO is silent on when prices might rise, he has given no indication of how much the price might rise. But if you look at the recent pattern, the recent price increase was pretty minimal. Basic membership went from $55 to $60 in 2017 and Executive membership went from $110 to $120.

As an author for The colorful fool Note that an extra $5 or $10 a year doesn’t make much of a difference to some people’s budgets. They recognized that any increase in cost can be difficult for individuals, stating that the value offsets the cost, at least for them.

“But if Costco makes the decision to increase the cost of a membership, the increase probably isn’t huge, and what you pay in the form of that increase you will outweigh in savings,” the author noted.

With other discounters and retailers out there, you might be wondering why people pay for Costco membership. Membership is a fee to offset savings customers receive on heavily discounted products. As Investopedia explains, when customers pay a fee, they may feel obligated to “get their money’s worth” by shopping at Costco whenever possible.