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Is It Worth It to Upgrade to a Costco Executive Membership? We Do the Math

Costco's Executive membership will cost you more money each month, but also gives you 2% back on your purchases. We break down how much you need to spend to get your money's worth.

Costco Executive Member card in hand
A Costco Executive membership gets you 2% back on purchases. Here's how much you'll need to drop per month to make it worthwhile. 
Costco

Buying wholesale or bulk groceries is a good way to save money on those receipts over the course of the year, provided you have the storage space in your home for a little bit of casual stockpiling. We previously examined the potential size of those savings when we broke down if Costco is really cheaper than a grocery store (spoiler alert, it was -- majorly).

We Do the Math badge

Costco, as well as other wholesale retailers such as Sam's Club and BJ's, offer tremendous savings on groceries and other household staples when purchased in bulk. However, there's a price for admission and basic membership fees range between $50 and $60 annually depending on your retailer of choice. If you're already a convert to the ways of wholesale grocery shopping, here we take a look at the potential benefit of upgrading your basic Costco Gold Membership to its Executive Membership level. We also calculated how much you would need to spend per month to make the Executive Membership worth it. 

Previously we tallied up which food delivery app is cheapest and how much you'll save shopping at Trader Joe's versus a typical grocery store. In this latest installment of We Do the Math, find out if Costco's Executive Membership is really worth it.

Costco Membership Options

Costco offers three levels of membership: Gold Star, Business, and Executive. Business Membership only applies to -- you guessed it -- businesses, so here we will concern ourselves with the Gold Star and Executive Membership tiers. 

Costo Gold Star Membership

Costco Gold Star membership costs $60 per year and is the minimum cost for access to any Costco store worldwide. In our previous post breaking down Costco prices versus a traditional supermarket, we calculated about $1,000 in savings annually for a household of two for yearly needs of 25 staple grocery items by buying at Costco rather than a conventional grocery store. (The larger the household, the bigger the savings.) $1,000 in savings over the course of the year averages to just over $80 in savings per month, meaning that your $60 membership pays for itself in the first month. 

And those are just in-store savings. Costco members also enjoy promotional savings on services such as bottled water delivery, travel, and even automobile purchases.

kirkland sign

Costco Executive membership will save you 2% more on Kirkland and more of the bulk retailer's already cheap groceries.

Costco

Here's what Costco Executive Membership gets you

Costco's Executive Membership is double the cost of its Gold Star tier at $120 per year instead of $60. The Executive Membership tier offers you additional savings on Costco services, but beyond that, the primary perk of Costco Executive Membership is an annual 2% reward on eligible purchases, up to $1,000 in rewards for the year. Eligible purchases include most grocery and household items but exclude tobacco products, gift cards, postage stamps, gas and alcohol in most states, as well as some services. Certain travel purchases, however, are included in this calculation.

Executive Membership also gets you lower prices on some of Costco's services, including check printing, bottled water delivery and roadside assistance.

Notably, if you decide midway through your yearly Gold Star term to upgrade to Executive Membership, Costco will prorate the remaining upgrade fee depending on how many months remain before your annual renewal. (If you have 6 months remaining in your yearly term, for example, the upgrade fee for Executive Membership will only be $30.) Once you upgrade to Executive Membership, your automatic renewal payment will stay at the Executive level, unless you decide to opt out before your renewal date, or if your membership is not authorized to automatically renew.

costco cereal on shelves

Even without the Executive membership's extra savings, buying in bulk at Costco could save you as much as $1,000 per year.

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How much you'd need to spend to make Costco Executive Membership worthwhile

In order to receive $60 in reward dollars and recoup the $60 more that an Executive Membership costs, one must spend $3,000 over the course of the year at Costco on eligible purchases, an average of $250 a month. Spend any more than that, and the rest of the reward is profit to spend on more groceries. To hit the maximum $1,000 reward, one would have to spend over $50,000 annually.

Potential Executive Membership Savings with the 2% Reward

The real answer to whether Costco Executive Membership is worth it comes down to the break-even point between the $60 cost to upgrade to Executive, and how much you have to spend at Costco annually in order to receive $60 back in savings. The following chart from Costco's website shows where that break-even point is and how much you'll net if you spend more per month:

Savings With Executive 2% Reward

Monthly Purchases Yearly Purchases Approximate Annual Reward
$250 $3,000 $60
$500 $6,000 $120
$800 $9,600 $192
$1,250 $15,000 $300
$2,500 $30,000 $600
$4,170 $50,040 $1,000 max.

Is Costco Executive Membership Worth It?

If you're already a Costco Gold Tier member, it would be useful to look at a year's worth of purchases to see if you're already hitting the $3,000 level, or even look at a handful of months to see if you're hitting an average of $250 per month. As you can upgrade at any time, now's a perfect time to start earning that 2% back.

If you're not already a Costco convert, you can look at your monthly or annual grocery purchases and apply a 33% discount -- this is what I found to be the average overall savings of shopping wholesale versus traditional retail -- to get an idea of how much you spend on groceries monthly or annually. We've already shown that a Costco membership is worth its savings, even with a conservative grocery spend, but you might consider going directly to the Executive level if your discounted total is consistently above $250 per month.

Bookkeeping company Intuit estimates that Americans spend about $150-$300 per month on groceries per person, a useful metric if you're not able to calculate your actual grocery costs. If your household is more than one person, and in certain cases even if your household is only one person, that $250 per month mark is easy to hit, making a Costco Executive Membership very much worth it.