With the new Costco Opening in Champaign this October: should you sign up for a membership in advance? Which deal is the best for your family? We break it down.
If you’ve been driving around Champaign-Urbana recently, you can’t miss the Costco tents that have popped up all over town.
To review, discount warehouse club Costco will open its doors in Champaign this fall, with a new store currently under construction on the site of the former Bergner’s at Marketplace Mall.
For those who aren’t familiar, Costco is a big box store that offers discount prices on many items as well as bulk buys. To shop there, similar to rival Sam’s Club, one needs to buy a “membership.”
It’s been confirmed that Costco opening day in Champaign will be Thursday, Oct. 22. (Start the countdown clock, here).
Costco is not opening in Champaign until October 22. Why do customers need a membership now?
What’s the purpose of the tents? It’s following the playbook Costco uses when it comes to a new town. Its goal is to encourage new memberships before the big day, so that when its doors do finally open, many customers can just walk in and start loading up their shopping carts. And in pandemic life, it makes a lot of sense to stay out of lines.
To get people to sign up early, they offer limited-time incentives that will “disappear” after opening day (this is also part of the playbook). We’ve seen literature from the local Costco marketing team that indicates the deals will be available as long as a month after opening.
We did a little “secret shopping” to find out what these Costco deals are all about.
First, some facts:
Memberships can be bought for individuals or businesses. (The price structure is the same, but there are a few differences. For one thing, businesses can add employees to their account for a fee.)
There are two options for Costco individual memberships; both Gold Star and Gold Star Executive memberships can be used to shop at Costco.com and as entry to the “clubs”, aka stores.
The “basic” option, called Gold Star, costs $60. It provides access to the clubs, and that’s about it.
The upgraded option, called Executive, costs $120. Executive Members receive an annual 2% Reward, up to $1,000, on qualified Costco purchases.
Current Offer: Bonus Shop Card Incentives
Right now, Costco is offering incentives to get folks signed up. The key to getting these limited-time incentives: customers must set up their membership to auto renew — on any Visa credit card. Customers that set up auto renew with a Visa credit receive a bonus in the form of a Costco “shop card” (what the company calls its gift cards).
In incentivize memberships, for the Gold Star membership, customers will receive a $20 shop card. If you sign up for the Executive Membership, you get a $40 shop card.
What’s such a great deal at Costco? Will I save money?
We’ve heard low prices on baby formula, tires and luggage, gas, and (many) prescription drugs make it worth a membership to Costco, to name a few things. We liked this line from the New York Times: “The bottom line is that a Costco membership can be worth it, depending on how often you go and what you buy.“
Executive or Gold Star?
Is the Executive membership a better deal? Costco did the math for us.
The 2% reward comes in the form of a reward certificate, not cash. Certain purchases do not qualify for the reward such as gasoline and food court purchases. It is eligible on most (but not all) expenses related to Costco Travel.
So what do you need to spend to make back that $60 and then some? According to this chart from Costco – and yes, we checked the math – one would have to spend $3,000 pre-tax, per year at Costco to make that Executive Membership worth it, in terms of recouping the 2 percent annual award.
That’s spending $250 per month.
For many that might be a stretch; for others, that might be the tip of the proverbial iceberg.
The current $40 shop card incentive makes the Executive Club membership attractive – at least for the first year. It may be worth it to some to take advantage of that.
There may be other benefits the Executive Membership provides that might make it worth it to you, regardless of what your annual spend is. Those take a while to dig out, and that will be different for everyone. They include various insurance offers and other business resources.
There is no one-size-fits-all answer to which membership is the better option. Do your homework, and always read the fine print.
Maybe a Costco membership isn’t right for your family at all. What can you do if you decide to sign up for a membership, but then realize that it’s not your jam? Can you change your mind?
Here’s the good news: Costco is very proud of its “risk-free, 100% satisfaction guarantee.” That means that customers can cancel their membership at any time – and get their money back.