Costco Is, After Many Years, Increasing Membership Fees

While Costco membership fees have remained steady for years, changes are in store at the popular warehouse retailer. According to a news release featured on the Costco Wholesale website, membership fees will increase in the U.S. and Canada on September 1, 2024. Members with Gold Star and Business plans will soon pay $65 annually, $5 more than the previous yearly fee, while Executive members will see a $10 increase per year for an annual membership fee of $130. Executive members will also see a hike in their maximum annual rewards limit, which will grow to $1,250 beginning in September (the current max is $1,000).

It's true that shopping at Costco comes with plenty of benefits, and early indicators show that most members are fine with the increased fees. Over on Reddit, many commenters appeared unaffected by the news. One person wrote, "I'm okay with 5 bucks more. The membership is still worth it," while another commented, "As long as they keep their prices low ... the savings outweigh the cost." Costco's last membership fee hike took place in 2017, and the most recent price adjustment comes hot on the heels of fee increases imposed by competing warehouse retail chains like Sam's Club.

Costco has been in the habit of raising its membership fees every five years or so; however, the September 2024 increase is coming seven years after the previous hike, and the reason for the delay is most likely ongoing economic strife. Inflation has spiked since the pandemic, which has impacted the financial stability of many consumers. In a quote to CNBC, Costco CEO Craig Jelinek said, "I don't think it's the right time," when asked about a potential fee increase in 2022.

Despite this ongoing economic strain, inflation has been steadily easing, which may be why Costco has now decided to go through with its increased membership fees. Also, it's worth noting that the chain makes most of its profits through its memberships, and these memberships allow Costco to offer affordably priced products to customers while also maintaining its bottom line. While most customers appear to be on board with the update, remember that Costco memberships come with quite a few pros and cons. Accordingly, prospective members will need to decide for themselves whether the slight increase is worth the price of admission.