It might be pretty simple to decide.
- Costco charges a membership fee to help offset its costs and maintain its low prices.
- Those fees aren’t rising immediately, but they could at some point in the new year.
- If fees go up, members will need to assess whether it pays to stick with Costco or move on based on the value they get from that membership.
It’s not a secret that inflation has been battering consumers and forcing many to dip into their savings accounts just to stay afloat. But it’s not just everyday consumers who are being hurt by higher costs. Many retailers are grappling with tighter margins now that it’s become more expensive to obtain inventory and hire staff.
Costco hasn’t been immune to inflation. In fact, in its most recent earnings call, the warehouse club giant said that higher costs have been impacting its bottom line.
Thankfully, Costco also managed to grow its membership base nicely in 2022. And as a result, it pledged to not raise membership fees for the time being.
But that could change in 2023. And if it does, you may find yourself wondering whether it pays to keep your Costco membership or give it up. The answer, however, really depends on what a fee hike looks like, and how much value you get out of Costco.
Could fees increase in 2023?
Costco usually raises its fees once every five years or so. At this point, it’s been longer than that since a fee hike took place. So while Costco isn’t raising its fees this quarter, it’s possible that the cost of a membership will go up in 2023.
But it could still very much make sense to retain a Costco membership, even at a higher price tag. For one thing, if Costco does raise its fees, it’s unlikely to do so drastically.
Right now, a basic Costco membership costs $60 a year, while an executive membership, which offers 2% cash back on Costco purchases, costs $120. There’s a good chance that Costco’s fee hikes won’t raise these numbers by more than $5 and $10, respectively.
So even in the case of an executive membership, that amounts to less than $1 extra per month. This means that if you can afford your Costco membership pretty easily right now, chances are, you’ll be able to afford it even if your costs increase.
It’s also important to remember that the fees Costco charges allow it to offer such competitive prices on the products it stocks. So while you might end up paying a little more for the privilege of being able to shop at Costco in 2023, you might reap enough savings in the course of your shopping to more than make up for a $5 or $10 fee hike.
It’s all about the value you’re getting
Ultimately, the decision to keep a Costco membership or not at a higher price point will boil down to how much value you get out of it. If you shop at Costco often and save a lot of money as a result, then a fee hike probably won’t be the thing that pushes you to cancel your membership. But if you don’t make it over to Costco all that frequently, or you don’t tend to have much luck finding the things you need, then it could pay to cancel your membership — regardless of whether fees increase in the new year or hold steady throughout 2023.
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