How To Tell If A Costco Membership Is Worth The Cost

If you have ever accompanied a friend or family member to Costco for a grocery run, you may have considered signing up for a membership yourself. After all, being a member is the only way to gain access to Costco's well-known warehouse, filled with free samples of food, Kirkland sweatshirts, and of course its food court.

But Costco memberships are not free. In fact, it starts out at $60 a year and goes up from there. That might not seem like a huge cost at first, but remember that your local supermarket down the road from Costco does not cost you a penny to step inside. So, that begs the question: Is a Costco membership worth it?

To answer that question, you have to look at a lot of factors like proximity, how often you actually plan to shop at Costco, and what kind of items your household could purchase there that it cannot find elsewhere. A Costco membership has become a non-negotiable must-have for many families, but that does not necessarily mean it works for you as well. Consider the following before signing up, and if the math makes sense for your family, you may find that you will not want to shop anywhere else.

Determine how far you live from the nearest Costco

The first question you should be asking yourself is how far away you live from the nearest Costco warehouse. The company has expanded over the year with more locations opening, so keep an eye on your state to see if any new ones are slated to pop up. But you need to realistically determine if you are actually going to drive, say, one hour to shop at Costco when there might be plenty of other grocery store options in between.

Not only will a long commute chew up a lot of time you could be spending elsewhere, but you will wind up using more gas in your car than you probably need to. And although Costco members have access to its gas stations at a lower price per gallon, it likely will not make up for the time spent driving back and forth.

Costco can be a convenient option if you live close to one and want to begin including it in your weekly or monthly rotation of grocery trips. But if you live too far away, you might find that you are paying for a membership you will not really use.

One huge factor is how many people live in your home

Another quick and easy way to determine if a Costco membership is even worth considering is how many people are in your home, and how many people you will be shopping for when making your Costco runs. Because Costco sells its groceries in bulk quantities, you will likely need several mouths to feed in order to justify buying that jumbo pack of croissants from the bakery. But while Costco might be associated more with larger families that have multiple children, you can still make it work for just you and one other person — but you might have to work harder for the numbers to make sense.

There are ways to make a Costco membership work for smaller households, as reported by NBC News. It may require some additional strategizing, but if you live close to a Costco and plan to shop there regularly, you might be able to make it work on a two-person household as that reporter did. It would, of course, be even more difficult if you are joining Costco as a single person, but if the cost-benefit analysis makes sense, then it could still be worth signing up.

How often you cook meals at home will likely be a big factor

When you go grocery shopping at Costco, you will likely wind up with a carload of food that you will need to strategize how to work through in the week ahead. Like any grocery shopping endeavor, you have to be in the mindset of meal planning, as well as actually cooking the meals with the groceries you buy. If you are more likely to eat out for your dinners or order take out, you might find that the Costco membership is not worth the price. But if you are an avid home chef and you prepare all of your meals yourself, then you might benefit from a membership, even if your household size is on the smaller side.

Sure, Costco can be a fun place to walk around and browse the aisles, but if you do not think you would actually buy and use the food in the warehouse, you are probably better off not signing up for a membership. Luckily, non-Costco members are welcome to walk through the warehouse when accompanying a member. So the next time your friend is heading to Costco, ask if you can tag along and see firsthand what the grocery selection is like.

If you find yourself throwing food out often, you may want to re-think a membership

Food waste is a big concern for many of us, and for good reason. According to the U.S. Department of Agriculture, food waste accounts for somewhere between 30 to 40% of the total food supply. That is an awful lot of food when you scale it down to your own kitchen at home. We tend to throw out food for any number of reasons, but that problem may escalate if you find yourself buying more groceries in bulk from Costco than you can actually use. If you are already throwing out food on a regular basis from grocery shopping, you will need to ask yourself if the problem will only get worse when you shop for those five pound bags of apples.

Some of the bulk food at Costco are non-perishable pantry items that have quite a long shelf life, so not everything will necessarily turn into a food waste issue. But before you sign up for a Costco membership, it might be a good idea to take inventory of which groceries actually make it to the dining room table each week, and which ones wind up in the trash. Using a Costco membership to its fullest potential might require a re-examining of your food habits so you do not wind up wasting any food or money.

Be aware that you won't necessarily save on groceries when shopping at Costco

One of the general perceived benefits of a Costco membership is that you can save on groceries. This can be true, depending on what you need to buy from the store and how long it can last in your kitchen. But before signing up for a membership, it is important to remember that buying food at Costco does not guarantee a huge amount of savings. For example, your local grocery store might have items on sale that wind up cheaper than what they would cost at Costco.

To make the most of your membership, you might have to do some math and shop around for the best deals, and learn what items are in fact cheaper at Costco, and which ones you might still be better off buying elsewhere. Knowing where to score actual deals might also involve memorizing Costco's method of pricing items. The basics are that an item with a price ending in $.99 is regular price and not on sale, but a price that ends in $.97, $.88, or $.00 might indicate a sale. In short, do not simply assume that the items at Costco are cheaper or that you are getting a better bang for your buck because the items are in bulk. That might be the case with some items, but you may be better off shopping for some groceries at Costco and others at your local supermarket.

Make sure your kitchen or home has enough storage space

Most of the groceries you will find at Costco are sold in bulk, meaning that an average trip's worth of groceries will take up more space in your car than a regular run to any other grocery store. This continues into your home, where all of a sudden you have a large two pack of vanilla ice cream to fit in your freezer, or an extra large container of cookies to fit in your pantry. If you happen to have extra storage space in your kitchen, or perhaps a second refrigerator in your garage, then you may find that there are plenty of places to store all of that extra food. But if you are tight on storage space, then a Costco membership may be more of a headache than it is worth.

In order to make the most of the cost of the membership, you should likely consider buying a good amount of your groceries from Costco. But if you have nowhere in your home to put those extra groceries, then you might discover you are not using the membership to its fullest potential. Take a look through your home to determine if the storage space exists, or if you perhaps need to look into buying additional storage-friendly solutions like a shelf unit.

Make sure you have a form of payment that Costco accepts

It is never fun when something goes awry in the check out line at the grocery store. It is even worse when you realize that, while you have a grocery cart full of items you are ready to pay for, you do not have the correct form of payment. That could be the case for many new members at Costco who are not aware of the form of payments the store accepts.

On Costco's website, it mentions how it accepts all Visa cards thanks to an exclusive agreement between the two companies. Because of this agreement, other major credit cards — including American Express, Discover, and MasterCard — are not accepted at Costco. If you only have one of those three credit cards, you may also be able to pay for groceries with mobile payment systems like Apple Pay and Google Pay. And of course, since cash is king, you can always remember to bring money with you specifically for grocery runs if you do not have a Visa.

Knowing what kind of groceries Costco sells is key before signing up

If you are not familiar with shopping at Costco, you may feel overwhelmed in the best of ways when you browse its aisles for the first time. From lawn furniture to clothing to rotisserie chickens, it seems like Costco has it all. And if you only shopped for groceries at Costco once you join, you will probably find that you can get everything you need for your kitchen there without a need to shop anywhere else. But there are some things to keep in mind when signing up for a Costco membership.

Costco sells all kinds of groceries, some of which you should make a point to always buy there each time you shop. However, there are some items that you are actually better off avoiding when shopping at Costco. For example, buying fresh produce such as fruits and vegetables in bulk is not ideal, since you are unlikely to go through all of it before it starts to rot. You are also unlikely to drink enough milk in one week to justify buying gallons or even half gallons in bulk.

There's more to a Costco membership than access to its groceries

Costco sells a lot of grocery items, yes, but in order to make the most of your membership, it is worth taking advantage of all of the other benefits that are included. If you sign up for a membership and only use it to buy groceries, you could be missing out on many other potential savings in your day-to-day life.

Costco sells electronics, jewelry, and furniture as well, in addition to services like home and auto insurance, as well as vacation packages. You can even get your prescriptions filled at Costco's pharmacy, as well as get new glasses or contact lenses. Costco members can also fuel up their cars at a discount at the gas station located next to the warehouse. Essentially, paying for a Costco membership gives you access to many benefits other than groceries, and if you want to sign up, it is to your advantage to research all of the perks.

You may want to consider the Executive membership

Costco sells a few different membership levels, including two levels for individual households. Its basic membership is $60 per year, but there is another level above that affords you even more perks: the Executive membership.

If you want to go all in on the Costco membership lifestyle, you may want to consider its Executive membership above the basic Gold membership. It is twice the price at $120 per year, but all Executive members earn 2% rewards up to $1,000 on qualifying purchases. So, depending on how much you spend in one year at Costco, the membership fee could be covered by those rewards. The math may work in your favor if, for example, you know you will buy the majority of your groceries from Costco on a regular basis. If you are not sure whether or not you will spend enough to at least cover the additional $60 it costs to upgrade to the Executive membership, then you might be better off starting out with the Gold membership.

If you have a business, you may want to look into the Business membership

Costco has membership options available for both individual family households, as well as businesses. If you own a business or work for one that could benefit from having a Costco membership, there is a Business level available for $60 per year that you may want to consider. Depending on your business needs, signing up for this level could be to your benefit, especially if you need groceries for various events throughout the year or if there is anything your business might resell — it all comes covered under this membership agreement.

Having a Business membership covers purchases at Costco that would be for personal, business, or even resale use. And because personal uses are covered under the Business membership, you would still receive an additional member card for someone in your organization or home. Just make sure you have all of the proper paperwork ready including your business license when you go to sign up for a Business membership.

Are there other warehouse retailers in your area that might be better options?

While Costco offers its members a lot of perks and benefits, it is not the only warehouse-style retailer around. If you do not live close enough to a Costco to justify signing up for a membership, perhaps you live closer to one of its competitors, like Sam's Club or BJ's Wholesale.

If you have all of these warehouses in your area, then it is worth looking at how the membership programs differ from one another before deciding which one to join. Sam's Club does offer its membership at a lower price than Costco, and there are other perks for higher-level Sam's Club members like earlier access to the warehouse each day. However, Costco Executive members stand to earn more rewards than Sam's Club members.

BJ's Wholesale, located along the east coast, also offers an array of membership perks, including same-day delivery on groceries. Costco gets a lot of attention for its free samples of food and fan-favorite Kirkland brand of products, but it is worth comparing these warehouses before deciding which one to join.