For the first time in seven years, Costco has announced a significant change that affects millions of members across the United States and Canada. The warehouse giant has increased its membership fees effective September 1, 2024, marking an 8.3% rise that impacts approximately 52 million memberships.
Breaking down the new membership costs
The basic Gold Star membership has increased from $60 to $65 annually, while the Executive membership now costs $130, up from $120. Business memberships and Business Add-on memberships have also seen a $5 increase to $65. However, there’s a silver lining for Executive members – the maximum annual 2% reward has been raised from $1,000 to $1,250.
What makes this increase particularly notable is its timing. Costco typically raises membership fees every five to six years, but this time they waited seven years, showing sensitivity to inflation-stressed consumers. The last increase occurred in 2017, when similar $5 and $10 hikes were implemented.
Impact on different membership types
The changes affect both new sign-ups and existing members differently. New members began paying the increased rates on September 1, while existing members will see the new prices reflected in their renewals starting from September 2024. Auto-renew memberships transitioned to the new rate structure automatically on the implementation date.
For the 52 million affected memberships, more than half are Executive members. These premium membership holders might find solace in the increased reward cap, potentially offsetting the higher annual fee through additional savings.
Membership perks remain strong despite increase
Despite the price adjustment, Costco maintains its commitment to member value. The company has notably preserved its iconic $1.50 hot dog and soda combo, a price point unchanged since 1985. Each membership continues to include one free household card for members aged 16 and over.
What would happen if Costco had maintained its 2017 prices? The company’s ability to offer competitive prices and maintain quality standards might have been compromised, as membership fees generated $4.6 billion in revenue last year alone.
New membership enforcement measures
Alongside the price changes, Costco has implemented stricter membership verification procedures. Members must now scan their physical or digital membership cards upon entry, and guests must be accompanied by valid cardholders. These measures aim to prevent unauthorized card sharing and enhance the shopping experience for paying members.
The warehouse chain operates 882 locations worldwide, with 609 in the United States and Puerto Rico. California leads with 139 warehouses, offering members extensive access to Costco’s services nationwide.
While the membership increase has sparked discussion among shoppers, Costco’s track record suggests minimal impact on member loyalty. With renewal rates standing at 93% in the U.S. and Canada, the wholesale giant’s value proposition remains compelling for millions of households, even at the new price points.
