Effective June 1, 2017, Costco’s two membership levels are going up by $5 and $10 respectively. The new fees are as follows:

• Gold Star Membership increases from $55 to $60
• Executive Membership increases from $110 to $120

This applies to Canada and the U.S., as they have the same fee in their respective currencies.

Breaking Even

I previously written a post about whether the annual fee is worth it, so I won’t go over all the details of the program. However, as a result of the new increase, I will update the break even calculations. Note that Executive Members get 2% cash back on all purchases (up to $750 cash back or $37,500 in annual spending).

Therefore, if you spend $3,000 per year, you would $60 in cash back, which makes up the difference between the two membership levels ($120 – $60). So if you spend more than $3,000 per year at Costco, then it is worthwhile to get the Executive Membership instead.

Conclusion

Normally, I would find it normal for a company to increase their membership fees to keep up with inflation, but for Costco, I would have hoped that they would decrease the fee, seeing as they are suppose to be a discount retailer.

Anyway, it has been reported that Costco has 85 million members worldwide. Even if we only calculate $5 increase per member, that’s an additional $425 million in revenue for them. How crazy is that?

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