How Do Costco's Executive Rewards Actually Work?

Gold Star, Business, or Executive: when deciding which Costco membership to invest in, you have to consider the benefits. Costco's Executive membership tier is the most expensive option at $130 per year. This fee includes the basic $65 membership cost, plus an additional $65 upgrade fee, but many people are willing to spend double based on the Executive rewards alone.

The big thing here is the annual 2% reward certificate. This is like a rebate that is calculated based on the total amount you spent at Costco throughout a 12-month period. For example, if you spent a total of $15,000 at Costco throughout the year, you'll receive $300 back. The reward is sent in the form of a check in the mail approximately two and a half months before your renewal date, and can be used in person at a Costco warehouse or online.

Before you start calculating how much money you might get back, there are quite a few technicalities. Only the purchases made by the primary cardholder or their one additional household member will qualify towards the rewards. Executive members will only receive one reward per household, regardless of how many additional cardholders and guests you might bring with you to Costco. The 2% reward also caps out at $1,250. In order to reach the maximum amount of rewards, you will need to spend at least $5,210 per month, or a total of $62,500 per year. Keep in mind that not every purchase counts towards the Executive rewards, as well. A detailed list of non-qualifying items can be found on Costco's website.

With a Costco Executive Membership costing double the basic "Gold Star" tier, is it actually worth the price? If you find yourself spending hundreds of dollars each time you enter Costco, the answer is likely "yes." One user shared their rebate check on Reddit, surprised that they maxed out the reward and earned $1,250. However, not every Executive member reaches an amount close to that – it could be a Costco shopping mistake for some.

One user commented that they only earned a $45 reward. Another responded, "Dude I got $90 and I thought that was going too far." While rewards are great, 2% is only a small fraction of your total spending. You'll need to spend $6,504 over the course of a year to get $130, essentially earning back the cost of your executive membership. However, in addition to the 2% reward, Executive members also receive additional savings on travel packages and other Costco services, like car repairs.

Ultimately, the type of membership you invest in depends on how often you plan on shopping at Costco. If you make most of your grocery runs at the warehouse and find yourself spending a few hundred dollars after each trip, you will likely see that 2% reward add up rather quickly. But if you only use your membership so you can stand in line at the food court to enjoy a delicious Costco hot dog from time to time, a Gold Star membership is really all you need.