4 Surprising Costco Rules All Members Should Know About

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It’s important to know how Costco works. Read on for a few rules you may not be aware of. [[{“value”:”

The decision to join Costco is an obvious one for some people. You may find that the benefit of saving money on groceries and household essentials outweighs the cost of a membership.

But if you’re going to shop at Costco, you need to know the rules. Here are a few that may surprise you — for better or worse.

1. Your Costco membership can be terminated at any time

Many people remain loyal Costco members for years. But you should know that your membership technically isn’t guaranteed.

As the store says on its website, “Costco reserves the right to refuse membership to any applicant, and membership may be terminated at Costco’s discretion and without cause.”

However, Costco makes a lot of its money from membership fees. And it wants more people shopping at its stores. Costco isn’t going to randomly take your membership away without a good reason, even though it states that it has the right to.

If you want to make sure your Costco membership isn’t revoked, don’t abuse it. For the most part, this means you should treat store employees respectfully, and you shouldn’t abuse the store’s generous return policy.

You can, for example, return a jacket you bought six months after the fact if you only wore it once or twice and realize you don’t like the fit. If that same jacket is tattered and stained because you wore it daily, and you try to get your money back, you risk having your membership revoked if you pull that sort of stunt repeatedly.

2. You can return partially eaten food, but you have to follow some guidelines

Costco stands behind all of its products. If there’s an issue with food you’ve purchased, you shouldn’t hesitate to take it back.

However, to get refunded for partially eaten food, you need to take back a reasonable amount of it. Generally, this means at least 50%.

Say you buy a six-pack of blueberry muffins and find that they have gone stale. If you return the package with five left, you shouldn’t have an issue getting refunded. If you bring back only two of the six muffins, you’re probably not going to get your money back.

3. You can cancel your membership at any time for a full refund

Costco doesn’t just stand behind its products — it also guarantees satisfaction with its memberships too. If you buy one and don’t get good use or savings from it, you can cancel for a full refund at any point.

This technically means you can shop at Costco for 364 days out of the year and then cancel, so you’ve gotten about a year of a Costco membership for free. But if you do that, don’t expect Costco to let you renew your membership right away. It’s likely that you’ll encounter a waiting period before being allowed to join again. And the length of that is at Costco’s discretion.

Chances are, though, you’ll get great value out of your membership as long as you use it regularly.

And if you double up with the right credit cards, you can eke even more value out of a membership. Click here for a list of the best credit cards for Costco shoppers.

4. You’re guaranteed to make back the cost of an Executive membership upgrade

It costs $65 a year to join Costco at the basic Gold Star level, or you can upgrade to an Executive membership for $130 per year. The Executive membership gives you 2% cash back on purchases, so if you do enough shopping at Costco, the upgrade pays off.

The risk, however, is not spending enough to get your $65 upgrade fee back and wasting money in the process. But Costco won’t let that happen.

One lesser-known feature of the Executive membership is that you’re guaranteed $65 back after a year. If you don’t make that money back naturally, you can downgrade your membership to a Gold Star one after a year, and Costco will pay you the difference.

For example, say you rack up just $50 back after a year of being an Executive member. When you downgrade, Costco will give you another $15 back so you’re not out so much as a penny.

Knowing how Costco works could help you make the most of a membership. And it might help you decide whether joining makes sense. Keep reading up on the warehouse club giant, because it never hurts to dig deeper into its rules.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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