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This Costco Rule Will Blow Your Mind

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Image source: Upsplash/The Motley Fool

There’s a reason so many people are willing to spend money for the privilege of shopping at Costco. The warehouse club giant offers competitive prices on everything from groceries to household goods to electronics. And your Costco membership also gives you access to competitively priced travel packages, home services, and tires.

But there may come a point when you regret spending money on a Costco membership. After all, your neighborhood supermarket doesn’t charge you money just to walk in the door — so why should you pay Costco for that privilege?

The good news is that you can actually shop at Costco for almost a year without technically having to pay for a membership. But you may want to pony up the money for the overall savings involved.

A beyond generous refund policy

A basic membership at Costco will run you $60 a year, while an Executive membership costs $120. And if you’re wondering why anyone would pay double for Costco access, it’s because the Executive membership gives you 2% cash back on your purchases. If you spend more than $3,000 a year at Costco, the Executive membership pays for itself (at least in terms of the $60 upgrade fee).

Meanwhile, Costco has an extremely generous refund policy for both merchandise and memberships. With regard to items you buy at the store, you can bring almost anything back at any time for a full refund. And yes, this includes partially eaten food!

As far as memberships go, Costco wants you to be happy there, too. If you’re not, you can cancel your membership at any time for a full refund.

But technically, what this means is that you can shop at Costco for 364 days, cancel right before the one-year mark, and get your money back. This effectively gives you a no-cost membership for a year.

You may want to keep your Costco membership despite the cost

You may be reading this and thinking, “Cool, I’ll just pay the $60 for a basic membership, use it for the majority of the year, and then cancel and get my money back.” Well, things may not be that simple.

Once you get used to the savings you get from Costco, you may have a hard time giving up your membership. So you may want to work the cost of one into your budget instead.

For a basic membership, you’re talking about a cost of $5 per month. And it’s only $10 per month for an Executive membership.

Meanwhile, let’s say shopping at Costco saves you $25 a month compared to sticking to supermarkets that don’t charge an entry fee like Costco does. If so, you’re saving well more than the cost of a membership.

Plus, don’t forget about the convenience factor. If there are non-perishable groceries you eat frequently, or products you use often, like tissues and laundry detergent, the ability to buy them in bulk could save you not just money, but time.

So while you can cancel a Costco membership right before the one-year mark and get your money back, that’s not necessarily a move you want to plan on. You may find that it’s more than worth spending the money on a membership for the ongoing benefits.

Top credit card to use at Costco (and everywhere else!)

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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