Costco Might Raise Membership Fees in 2023. Here’s Why That Doesn’t Bother Me

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There’s a reason those fees exist in the first place. 

When I first got a Costco membership, I only used it on occasion. But now that I have a household of hungry kids to feed, I generally shop at Costco on a weekly basis. It’s my go-to source for everything from produce to dairy products to lunch items I send to school. And I also like to load up on things like paper towels, cleaning supplies, and laundry detergent at Costco, where I can snag a nice discount — and enjoy a lower credit card tab — by purchasing these items in bulk.

Meanwhile, I have an executive Costco membership, which costs $120 a year and gives me 2% cash back on my warehouse club purchases. A basic membership, however, costs $60.

But these numbers aren’t set in stone. In fact, Costco has not increased the cost of a membership since June of 2017. Since it commonly raises its membership fees every five and a half years or so, it’s fair to say that we’re due for an increase in 2023. And since Costco, like many retailers, has been feeling the strain of inflation, it wouldn’t be unreasonable for the warehouse club giant to try to recoup some of its costs in the form of higher membership fee revenue.

But while the idea of paying more for a Costco membership may not sit well with some people, I won’t be bothered at all if the cost goes up. And there are a couple of reasons why.

1. A price hike is unlikely to be substantial

In June of 2017, a basic Costco membership rose from $55 to $60, while the cost of an executive membership rose from $110 to $120. If Costco follows a similar pattern this year, those with a basic membership are looking at a $5 increase, while those with executive memberships are looking at paying $10 more.

I fall into the latter category. And I can say with honesty that based on what I spend on groceries in a year, another $10 is not going to make a difference. Not at all.

I do recognize that consumers who are very cash-strapped might feel differently. And I truly don’t want to be insensitive to that. But think about how often many of us spend $5 or $10 without even thinking about it. A single cup of coffee and a muffin you buy on a whim could cost you that much or more. So to me, it doesn’t make sense to get worked up about a $5 or $10 fee hike.

2. Those membership fees save me money

Costco uses its membership fees to offset its costs, thereby making it possible to offer such competitive prices. The amount of money I save at Costco on a yearly basis is well more than what my membership fee costs me. So even if that fee goes up a bit, I’m still going to come out ahead.

At a time when inflation is still soaring and paychecks aren’t going as far, nobody wants to see their bills increase. But if Costco does make the decision to raise the cost of a membership, chances are, the increase won’t be tremendous, and what you pay in the form of that increase, you’ll make up in savings.

Plus, Costco has not implemented a fee hike since mid-2017. How many of your other bills have held steady for that long? Chances are, none. So all told, raising fees in 2023 would not be unreasonable.

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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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