Last weekend, my wife and I stopped by the local Costco to renew our membership, which expired at the end of March. As expected, they asked us if we wanted the Goldstar Membership for $55, or the Elite Membership for $110, with which members get 2% cash back on purchases.
The customer service representative sensed our hesitation, and reminded us that if we didn’t earn the $55 price difference in cash back rewards, Costco would make up the difference themselves. That’s what happened last year, as we only earned $23 in rewards.
With this guarantee in place, as long as you follow through on getting a refund, there’s no way you could lose money on the upgraded membership.
We signed up for the Elite membership, and are determined to make it work in our favor this time. In order to just break even and earn $55 in rewards, we’d have to spend $2,750 at Costco in the next year. That works out to $230 per month, or about one third of our overall budget for groceries and household items.
The key is to buy things at Costco we’ve been buying elsewhere — not to increase our overall spending.
When we got home, I started compiling a list of things that we’ll now buy from Costco, along with an estimated amount spent per month.
- Toilet paper: $20
- Cat food: $25
- Laundry detergent: $15
- Meat (beef, chicken, pork): $120
- Produce: $80
- Snacks: $80
- Soda/water: $40
This list is by no means complete, but I wanted to quickly see how feasible it would be to earn my $55 back with the 2% cash back rewards. If I could buy $380 of products from Costco each month, my total amount spent for the year would be $4,560, earning $91.20 in rewards.
My ultimate goal, however, is to earn enough cash back to pay for my membership next year. To do that, I’d have to spend $5,500 in a year, or about $460 per month. I love a good challenge, so I’m going to give it the old college try and start looking for other things in our monthly spending that I could get at Costco.
If we don’t earn back at least the membership price difference this year, we’ll just go with the basic membership next year.
Do you have a Costco Elite membership? Do you earn enough cash back to make it worth it?
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