alt Hacker NewsI always found that weird because we get like 5x our membership dues back in rewards every year, so I guess we're the exception, rather than the rule?
Replies
If you have an executive membership they guarantee that you make back your membership dues. If you fall short you can just ask them to give you the difference (and then they will downgrade you to the regular membership).
But also remember regular members don't get cash back. The ratio is about 50/50. So about 40 million people pay for membership and don't get cash back.
The only year I broke even-ish on my executive membership was the year I bought an expensive engagement ring. All other years I (household of 3-4) went below break even. I lived 1/4th of a mile across the highway from them even. I just couldn’t make it work.
Could be like gym memberships: where there's a population of folks that pay but don't make use of it (and don't bother cancelling).
The claim could be true even if every customer is exactly like you. The implication is that Costco doesn't really make money selling stuff, they just need to roughly break even. And "breaking even" here includes paying rewards on purchases. The fact that you earn a lot of rewards doesn't stop your membership dues from contributing to Costco's bottom line.