Is The Costco Membership Still Worth It In 2016? Everything You Need To Know

The value offered by a Costco membership has been substantial enough that 85 million shoppers in the United States, Canada, the United Kingdom, and eight other countries have paid $55 (or their local equivalent) to sign up. Is a Costco membership worth it in 2016? For most people, the answer is probably yes, but there are always exceptions. Those who live on their own and prefer variety may not find value in the Costco membership. However, bigger households, and those who consume larger amounts may find significant savings.

In the United States, Costco Wholesale Corporation (NASDAQ: COST) charges $55 for a personal “Gold Star” membership and $55 for business memberships. These memberships allow individuals and business owners access to Costco warehouses and gas stations, as well as providing additional cards for adults over the age of 18, including spouses, common-law partners, children, and even roommates, offering the same access.

For those with larger families or businesses, $110 Costco Executive memberships are available for Gold Star personal and business customers. In addition to all the benefits of the $55 membership, the executive memberships include 2 percent back on most purchases at the end of the year in the form of a voucher redeemable at Costco. The 2 percent back offer does not apply to gasoline, other purchases at gas stations, cigarettes, Costco food courts, and some other purchases.

Costco reports that a customer purchasing $3,000 per year would receive no benefit from the executive membership, but that those spending $9,600 would save $144, more than paying for the price of the membership even before the savings on Costco regular member prices are considered.

The question of whether a Costco membership is worth it for a single person was discussed on Reddit recently. For big consumers and businesses, Costco really does appear to offer savings for those who buy in bulk.

“Costco has the cheapest gas, and cheapest propane. If you get your gas at Costco that alone will get you back your… membership. I save somewhere in the vicinity of $300/year on gas by shopping Costco,” one Reddit user writes.

Another Reddit user estimated that the full price of a membership might not offer enough value to attract singles, but that a household membership shared by two or more people almost certainly does.

For individuals, it takes a little bit of research to determine if a Costco membership is worth paying for, considering the items most likely to purchased. Thankfully, Costco and competitors like Walmart offer websites where customers can research items before buying them. Some popular products are examined for their value when purchased at Costco.

Starbucks Breakfast Blend Medium Ground Coffee

This popular coffee may be purchased in 20-ounce packages for $11.98 at Walmart. At Costco, the same product is available in three packs for $42.99, or $14.33 per 20-ounce package; probably not a great value for anyone to purchase at Costco.

Mobil 1 0W-20 Advanced Fuel Economy Full Synthetic Motor Oil

Costco offers one packaging format for this motor oil, a six-pack of one-quart bottles priced at $36.99, or $6.16 per quart. Walmart offers five-quart jugs for $22.88, or $4.57 per quart and individual quarts for $7.98 each. For consumers who must have their motor oil packaged in individual quarts, Costco offers substantial savings, close to $2 per bottle, but overall, Walmart offers the best oil deal when buying five-quart jugs.

Quaker Life Cereal

Costco offers a 62-ounce box of Quaker Life Cereal that is regularly priced at $8.55, and is on sale until August 31 for $6.15, giving a regular price per ounce of $0.134 and a sale price per ounce of $0.099. At Walmart, Quaker Life Cereal is offered in several packaging options, an 18-ounce box is priced at $3.16 or $0.176 per ounce, a 70-pack of 1.09 ounce boxes is priced at $46.36, or $0.607 per ounce, which is quite pricey.

For a household that consumes one 18-ounce of Quaker Life Cereal per week the Costco membership could save $72.07 for one year’s worth of cereal when buying the 62-ounce box before August 31, compared with the 18-ounce box at Walmart — more than paying for the price of an individual membership.

Costco offers savings depending on the items being considered. Simply purchasing a Costco membership and buying solely from the wholesaler can result in consumers paying more than necessary and in larger quantities than possibly desired. By regularly comparing prices of frequently consumed items at Costco, Walmart, and other retailers, shoppers can ensure they are getting the best deals. In some cases Costco will offer substantial savings, but not always.

[Photo by Justin Sullivan/Getty Images]