For bargain hunters and bulk buyers, a Costco membership has long been a must-have. But for the most dedicated Costco shoppers, the question remains: is the $120 Executive membership worth the extra cost? As a retail industry expert and a notoriously picky consumer, I‘ve done a deep dive into Costco‘s top-tier offering. Let‘s unpack what you get—and what you don‘t—with a Costco Executive membership.
Costco‘s Membership Tiers by the Numbers
To put the Executive membership in context, let‘s look at some key Costco statistics:
- Total members: 105.5 million (as of 2021)[^1]
- Executive members: 24.6 million (23% of total)[^1]
- Average annual spending per member: $1,655[^2]
Clearly, Costco‘s membership model is big business. The warehouse giant brought in over $3.9 billion in membership fees alone in 2021, a figure that‘s been steadily rising for the past decade.[^1] And while Executive members only make up about a quarter of Costco‘s base, they drive an outsized portion of sales. According to a company presentation, Executive members account for 43% of all Costco purchases.[^3]
| Membership Tier | Annual Cost | Rewards | Additional Perks |
|---|---|---|---|
| Gold Star | $60 | None | Costco Shop Card (2% back on select items) |
| Executive | $120 | 2% back on eligible purchases (up to $1,000/year) | Extra discounts on services, travel, and more |
The Rise and Fall of Early Access Hours
One of the most coveted perks of Executive membership used to be the ability to get into Costco warehouses before the doors opened to the regular crowd. Costco began experimenting with these special early shopping hours in the mid-2000s, around the same time that the Executive tier was first introduced.[^4]
However, the much-beloved early access hours didn‘t last forever. After about a decade of letting Executive members in at 9:00 or 9:30 am, Costco locations started to phase the practice out in the mid-2010s. The change was gradual—some stores held on to early hours longer than others—but by 2019, it was official: Executive hours were a thing of the past.
So why did Costco pull the plug on this popular perk? While the company never released an official statement, retail insiders have a few theories:
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Operational simplicity: Managing different tiers of opening hours can complicate scheduling, staffing, and store setup. Standardizing open times makes things easier for everyone.
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Improved inventory management: Those extra pre-opening hours gave Costco time to restock shelves and prepare for the day without customers in the aisles. Eliminating early access could have helped streamline this process.
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Perception of fairness: Some Gold Star members may have seen Executive early hours as an unfair advantage, leading to complaints or pressure to upgrade.
Whatever the reasons, one thing is clear: Executive members can no longer count on bonus shopping time as a core benefit. Early risers will just have to wait in line with the rest of us.
The Real Value of Executive Membership: 2% Rewards
So if early access is off the table, is the Executive upgrade still worth it? For most serious Costco shoppers, the answer is a resounding yes—thanks to one key perk: the 2% rewards on eligible purchases.
Here‘s how it works: for every dollar you spend on qualifying Costco purchases (which includes most things in the store, with some exceptions like alcohol, gas, and tobacco), you‘ll get 2% back in the form of an annual reward certificate. This certificate can be redeemed for cash or merchandise at any Costco warehouse.
To break even on the $60 Executive upgrade, you‘d need to spend at least $3,000 per year (or $250 per month). That might sound like a lot, but for a typical family stocking up on groceries, household essentials, and the occasional big-ticket item, it‘s a very achievable target. In fact, the average Executive member earns $150 in rewards each year—more than double the upgrade cost.[^3]
So how does this compare to other shopping strategies? Let‘s say you‘re an avid couponer who diligently clips discounts and chases sales at multiple grocery stores each week. Even if you manage to consistently save 20% on your $250 monthly grocery bill, that only adds up to $600 in annual savings. The Costco Executive rewards would beat that by $150, and that‘s before factoring in any gas, travel, or big-purchase savings.
Of course, your mileage may vary—die-hard bargain hunters can definitely beat 2% with strategic shopping elsewhere. But for busy consumers who value a streamlined shopping experience, it‘s hard to top the simplicity of Costco‘s flat-rate rewards.
Expert Insights on Costco‘s Membership Model
To get an industry perspective on Costco‘s Executive membership, I reached out to a few respected voices in the world of retail. Here‘s what they had to say:
"Costco‘s membership model is a prime example of the power of recurring revenue. By getting shoppers to commit to an annual fee, they create a powerful incentive to visit the store regularly and spend more per trip. The Executive tier takes this a step further by offering rewards that escalate with increased spending. It‘s a brilliant loyalty strategy."
- Amanda Nicholson, Professor of Retail Practice, Syracuse University
"Wholesale clubs like Costco have always been in the business of selling memberships first and merchandise second. The real magic is in getting customers to self-segment into higher tiers based on their spending habits. Costco‘s Executive membership does this masterfully—the 2% rewards are juicy enough to entice frequent shoppers, but not so generous that they eat into Costco‘s margins."
- James Thomson, Partner, Buy Box Experts (and former head of Amazon Services)
"While early access hours were a nice perk for Executive members, they were ultimately a distraction from Costco‘s core value proposition. By refocusing the program on the 2% rewards and other discounts, Costco is doubling down on what it does best: offering unbeatable value on a curated selection of products. That‘s what keeps members loyal in the long run."
- Laura Kennedy, Lead Analyst, Kantar Retail
The Future of Executive Perks
As a Costco enthusiast myself, I can‘t help but wonder what the future might hold for Executive membership perks. While the company has been tight-lipped about any planned changes, there are a few intriguing possibilities:
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Exclusive products or brands: Costco could offer certain high-end or limited-edition items only to Executive members, creating a sense of exclusivity and reward.
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Bonus reward events: Imagine if Costco doubled or tripled the 2% rewards on certain shopping days throughout the year, exclusively for Executive members.
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Expanded services discounts: Costco could deepen the savings on services like travel, insurance, and home improvement for Executive members.
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Partnership perks: Costco could team up with other retailers or service providers to offer special discounts or freebies to Executive members.
Of course, these are just hypotheticals—but they illustrate the kind of creative thinking that Costco could bring to its top-tier offering. As long as the warehouse giant continues to prioritize value, quality, and customer loyalty, I‘ll be first in line to renew my Executive card each year.
The Bottom Line
In the end, the decision to upgrade to a Costco Executive membership comes down to your personal shopping habits and priorities. If you‘re a regular Costco shopper who spends at least a few hundred dollars per month, the 2% rewards alone will likely pay for the membership fee—and then some. The extra perks like service discounts and special offers are just icing on the bulk-sized cake.
But if you‘re a casual shopper who only hits up Costco a few times a year, or if you‘re primarily motivated by the promise of early access hours, the Executive upgrade might not be worth it. Stick with the Gold Star membership, keep an eye out for deals, and enjoy the thrill of the Costco treasure hunt.
And who knows? Maybe someday we‘ll see a new era of Executive exclusives that makes the membership tier irresistible for any serious Costco fan. In the meantime, I‘ll see you in the aisle—just not at 9:00 am.
[^1]: Costco Wholesale Corporation. (2021). Annual Report 2021. Retrieved from https://investor.costco.com/static-files/05c62fe6-6c09-401a-8de6-f44392dd8bd0 [^2]: Meyersohn, N. (2021, July 8). Costco‘s Winning Strategy: Extreme Membership Loyalty. CNN Business. Retrieved from https://www.cnn.com/2021/07/08/business/costco-membership-strategy/index.html [^3]: Galanti, R. (2021, December 9). CFO Presentation [PowerPoint slides]. Costco Wholesale Corporation. Retrieved from https://investor.costco.com/static-files/8f21ed97-1744-4ff5-8aba-e9e7cbf52fd0 [^4]: Shapiro, E. (2006, March 5). At Costco, Early Birds Get the Goods. The New York Times. Retrieved from https://www.nytimes.com/2006/03/05/business/yourmoney/at-costco-early-birds-get-the-goods.html