Is Costco Worth the Membership Fee?

This is the question my husband and I have been asking ourselves for the past few months.

We have been Costco members for several years. We originally joined when friends told us Costco had the best prices on automobile tires. We ended up buying a set of tires at that time, and have continued with our membership ever since. Is it a good deal? A great deal? Or a rip off?

First off, there are 2 different membership options for individuals and families. (I'm not counting the business or corporate membership option.) You can pay $55 per year, get no money back refund check, and have access to most of Costco's benefits. For $110 per year, you get 2% back in the form of a refund check once per year. (Not every purchase counts toward this rebate.) We have always opted for the higher cost option, and every year so far, we have received a refund check in excess of our membership fee.

Because this refund makes our membership basically free, you might think the decision is a no-brainer. Why not join for another year, if the cost is not really an issue?

There are other factors to consider, though.

1) Costco no longer takes American Express. Costco now only accepts Visa. This happens to be less convenient for us, but may not be an issue for you. Costco also accepts cash, which may or may not be appealing to you.

2) Costco has lower gas prices than anywhere else in our area. Probably about 5-10 cents lower per gallon than the next cheapest gas that is close by. (The money spent on gas doesn't count toward the rebate check, however.) Gas lines and wait times vary, but lines are almost always longer than you'd find anywhere else. Weekday mornings are not usually too terrible.

3) Costco sells only jumbo-sized packages of everything. This means we often purchase more than we need. This applies to stuff like tortilla chips, sausages, guacamole, even shampoo. My hubby is convinced we end up eating, drinking, or using more than we would if we had purchased a regular-sized package. It also means that we choose not to purchase many products Costco carries simply because we don't want to buy and store so much. This is especially true of refrigerated and frozen goods like milk, eggs, organic whole chicken, yogurt, cottage cheese, etc.

4) Costco carries many high-end, organic, excellent quality products at the lowest prices of any local grocery. So if you tend to use large quantities of these products--for us, this applies to Kerrygold Butter, for example--you might prefer to buy these at Costco. While we can buy this same butter at Trader Joe's or even Harris Teeter, the price per pound is lowest at Costco. We also buy large containers of coconut oil, olive oil, bacon, goat cheese, ground turkey, and sliced turkey breast. These products are all top quality and we can either freeze the excess, or use it up before the sell-by date.

5) For staples that go bad more quickly, like salad greens, fresh fruit, and meat, we tend to prefer to shop at local farmers' markets, Trader Joe's or other grocery stores. This goes back to the same problem with jumbo-sized packages--fresh produce tends to rot more quickly than we can consume it.

6) Costco has some excellent prepared foods. If you're having a party, Costco is a great place to find prepared salads, sandwiches, roll-ups, etc. The bakery items are also high quality and well priced.

7) We purchase all our pool chemicals at Costco. These are expensive anywhere, but usually go on sale at the beginning of the summer.

8) Costco has low prices on some clothing. I've found shearling boots, down vests and coats, Polartec jackets, and other impulse purchases for much less than other stores. The quality of these items might also be slightly less than name-brand.

You can see from my list that Costco membership has many pros and cons. However, there are a few factors that push us toward keeping our membership: Costco is right next to Trader Joe's, where I love to shop. If we are already in the vicinity, we might as well hit Costco for the things we prefer to buy there. And if we can continue to receive a rebate check which offsets the total cost of membership, then why not?