Costco’s first membership price hike in 7 years just went into effect
Sep 3, 2024, 11:40 AM | Updated: 11:41 am
Customers walk by the membership counter at a Costco store on July 11, 2024 in Richmond, California. (Justin Sullivan, Getty Images via CNN Newsource)
(Justin Sullivan, Getty Images via CNN Newsource)
(CNN) — Costco customers are now paying more for their annual memberships for the first time since 2017.
The retailer announced in July that membership fees would increase by $5 to $65 a year in the US and Canada for three of its plans: “Gold Star,” “Business” and “Business Add-On.” The changes started for new members signing up on or after September 1 and renewals occurring after that date.
The price of Costco’s premium “Executive Membership” also went up, by $10 to $130 a year. However, those members will soon be able to earn a maximum of $1,250 in rewards annually versus $1,000 currently.
The company estimated that 52 million memberships will be impacted, a little over half of which are Executive members, Costco previously said.
Annual fees have been one of the biggest profit-generating areas for Costco, helping it offset expenses to keep its prices down. Last year, Costco earned $4.6 billion in revenue from membership fees, an 8% increase from 2022.
The fee hikes come as Costco, like streaming companies, has been taking more measures to ensure fewer non-subscribers are hitching a ride on other customers’ memberships.
Costco (COST) is cracking down on membership moochers by implementing stricter policies and requiring shoppers to scan their membership cards to enter stores.
“Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse,” Costco said in a previous statement. “Once deployed, prior to entering, all members must scan their physical or digital membership card by placing the barcode or QR Code against the scanner.”
For members with cards that don’t have a photo, Costco says to come prepared with a valid photo ID but encourages shoppers to visit the membership counter and have their photo taken.
Costco’s new rule also requires all guests to be accompanied by a valid cardholder to enter its stores, making it more difficult for non-members to sneak in using cards that don’t belong to them.
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