Costco wants its members to either join as Executive Members or pay the $65 it costs to upgrade from a Gold Star membership.

That’s because Executive members not only pay twice as much to join ($130 instead of $65), they also have incentive to visit the chain. The higher-level membership comes with 2% cash back on most purchases up to $1,250.

If you spend the extra money for the pricier membership, it’s likely that you will want to get more cash back in order to justify that expense.

“For Costco, membership fees largely go straight to the bottom line, so offering Gold Star and Business members an extra incentive to upgrade to the Executive level could be a boon to company profits, especially since gross margins are a slim 11% in product sales,” Forbes reported.

To sweeten the deal for Costco members to pay for an Executive membership, the warehouse club now opens at 9 a.m. daily, an hour earlier than it used to, but only for Executive members.

That perk, which was added in late June, has actually proven to be a boon for all members.

Costco’s change improves shopping for all members

“The additional morning hour appears to have encouraged some Executive Members to shift their trips earlier in the day, which in turn reduced traffic concentration during late-morning and afternoon peaks,” wrote Placer.ai.

The data research firm shared more about how the new Executive member hours impacted shopping patterns at the chain.

  • The extended hours reduced concentration of shoppers during traditional late‑morning and afternoon peak times, spreading visits more evenly.
  • After the early access implementation, visits of 30-45 minutes increased, while longer, 45-60 minute visits declined, suggesting shoppers used the quieter early slot more efficiently.
  • Overall, this early hour appears to improve the customer experience without requiring additional staff by smoothing out traffic flow and reducing peak congestion.
    Source: Placer.ai

As a lapsed Costco member who is moving back to a market that has a nearby Costco, I could see the added hour as a perk that might tip me toward the more expensive membership.

The deciding factor, however, would likely be whether my local Costco offers gas, because I would likely not spend enough to justify the added cost without that.

Costco adds Exectuive members

Executive memberships continue to grow as part of the chain’s overall business.

“Membership income grew 7.3% year over year. This was driven by continued growth in our membership base and increased upgrades from Gold Star to Executive membership,” CFO Gary Millerchip shared during Costco’s first-quarter earnings call.

The chain continues to grow its Executive member base.

At Q1 end, we had 39.7 million paid executive memberships, up 9.1% versus last year. We ended the quarter with 81.4 million total paid members, up 5.2% versus last year and 105.9 million cardholders, up 5.1% year over year,” he added.

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Millerchip also specifically addressed the impact of the added shopping hours for Executive members.

The extended opening hours were “certainly a major benefit for our Executive members [who had] an extra hour in the morning on most days to shop the warehouse, but we also added an extra hour on a Saturday evening for all of our members. And if you think about the earlier hours, it often extends the total shopping members in the warehouse. So it spreads out the traffic if you like to make [the] experience better for all our members,” he added.

Costco members also get perks, including free samples.

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Experts think Costco made a smart move

“The earlier hours add another benefit to the Executive tier of the membership program. Yes, it may cause a little confusion (and even resentment) but it may also encourage some people to trade up to a higher tier. It’s not as if other tiers lose anything as the opening hours will remain the same as they are now,” GlobalData Managing Director Neil Saunders wrote on RetailWire.

David Biernbaum, who has nearly 50 years of retail experience, thinks the downside is a little more risky than does his colleague on RetailWire’s Brain Trust.

“Exclusive hours may appeal to some customers seeking a more personalized service, but they may also alienate others who are inconvenienced by the restricted access. This limitation may deter potential Executive members from shopping during the designated times, potentially resulting in a loss of sales. Furthermore, managing these exclusive hours could entail additional operational costs, which could offset any potential profit increases,” he posted.

Most analysts, however, were positive on the move.

“By treating its best customers best it reinforces why you should be a best customer. Remember the supermarket chain that set aside a checkout lane for shoppers with more than 25 items while the competition was doing less-than-ten-item lanes? Reward your best customers and you’ll get more of them,” added Warren Shoulberg, another Brain Trust member.

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Costco Executive membership FAQ

  • What is Costco’s Executive Membership? It’s Costco’s premium membership tier that offers extra perks, including cash-back rewards, for a higher annual fee.
  • How much does an Executive Membership cost? The Executive Membership costs $130 per year, which includes the base $65 membership plus a $65 upgrade.
  • What are the main benefits? Executive members earn 2% back on most Costco purchases, up to $1,250 per year, along with added perks like service discounts and select monthly credits.
  • Is the Executive Membership worth it? Many experts say it pays for itself if you spend about $3,000 to $3,250 per year, since the 2% reward can offset the extra $65 cost. (Source:CNBC)
  • Do Executive Members get early shopping hours? Yes. Costco has rolled out exclusive early access hours at many locations for Executive Members.
    Source: Costco

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