Here’s why you deserve an executive membership

Walk into a Costco warehouse and the options are endless: “Yeah, I need some yellow legal pads, but do I really need 48 of them?” “Man, that fryer is a good deal and we’re going to eat even healthier, right?” “CoQ10, what’s that? I heard it’s supposed to be good for you; what the hell, it’s only $24.95 for 200 pills.”

And that’s even before you have to decide between pizza and a hot dog at the food court. Now it gets hard!

While such conundrums abound, the real choice in a Costco is what kind of membership to opt for. Even if you are already a member, this is an annual decision and the options are:

• Golden Star subscription
• Members of the Executive

Let’s unpack both and see why the smarter move is to choose Executive membership.

Gold Star Base Quality vs. Executives

While Costco’s basic Gold Star membership puts you in the bargain bin and offers excellent value, more than a few savvy shoppers opt for the Executive membership. Why? The main reason is that upgrading can offer even more savings.

The Gold Star membership, priced at $60 annually (but set to increase to $65 on September 1), gives you access to Costco warehouses and online shopping. It’s a great deal, especially if you’re shopping for a family, organization, business or restaurant. The price drops for buying in bulk can’t be beat. If that’s all you’re looking for, then the Gold Star Membership might be just the ticket for you.

That said, Executive membership, at $120 per year ($130 as of September 1), includes all the Gold Star benefits. addition other impressive advantages that can quickly offset the higher cost. That’s why so many people go with Executive membership.

2% off secret weapon.

The standout feature of the Executive membership is the 2% reward on eligible Costco purchases. This accumulated cashback applies to most items, including Costco Travel bookings.

Let’s say you spend $3,000 a year at Costco (about $250 a month). That means at the end of the year, you’ll get a coupon in the mail from Costco equal to 2% of your $3,000 spent, or about $70. By choosing Executive membership, you have made a profit of $10. Either way, the extra $60 you spent for the top tier membership is more than offset by the 2% savings.

For families or businesses with larger credit card tabs at Costco, this reward can be significant. Spend $6,000 a year there and you’ll earn your entire membership fee. Sweet!

And who is your typical Costco shopper? According to Investopedia, “The average shopper in the United States is an Asian-American woman. College educated and 39 years old, this individual earns more than $125,000 a year.”

Exclusive offers and additional savings

But the benefits and bonuses of an Executive member don’t stop there. Executive members often receive special offers not available to Gold Star members. These may include:

• Additional discounts on services such as insurance and home installations
• Early access to new products or special events
• Increased savings on Costco Travel packages

Travel for less with Costco Travel

Indeed, another bonus benefit of Executive membership is the travel discounts that can really add up. The 2% discount applies to all aspects of Costco Travel purchases (vacations, cruises, rental cars, etc.) for substantial savings. In addition, executive members often receive room upgrades and other travel perks.

So which one is best for you?

If you don’t buy a lot at Costco, then a Gold Star membership should be enough. This is especially true if gas is one of your major purchases there, as the 2% cash back doesn’t apply to gas.

On the other hand, for most regular Costco shoppers, Executive membership almost always pays for itself quickly, especially when travel is added.

And note this last great perk: You can always back out for a refund if you choose Executive membership and find it doesn’t work out. So your best bet is usually to go for the Executive tier and let those little black Costco membership cards fall where they may.