Costco and Amazon will increase the cost of club cards: when and by how much

Costco Membership Fees Likely to Rise This June, Reports bestlife.

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Shoppers choose Costco for many reasons, but the ability to save a lot of money on their purchases probably tops the list. A warehouse retail store makes it easy to stock anything from daily necessities to electronics, baked goods and batteries. But if you're a die-hard Costco fan, you should be prepared for a major price change this June that could affect all shoppers.

Costco differentiates itself from other discount retailers by offering items in bulk at low prices, but its most notable difference is the membership required to access these offers. And since it's been 5 years since the store last changed its annual membership price, chain executives are hinting that membership card prices are likely to rise as part of the company's previous price increase schedule.

Experts predict that the cost of an annual membership may increase by $5-10 per year.

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There are currently two types of memberships that Costco customers can sign up for. Gold Star members pay $60 per year for two-member store access per family, including the ability to shop on the Costco website. Other Executive members pay a higher annual rate of $120, but they also receive 1000% cashback on all eligible purchases up to $XNUMX per year.

Costco raises the cost of its membership on schedule every five years, John Heinbockel, executive analyst at Guggenheim Securities, writes in a research note. With that in mind, he estimates that the annual cost of a Gold Star membership will increase by $5 to $65 per year, while Executive members should probably expect their prices to increase by $10 at a $130 annual fee.

Costco customers are rapidly renewing their membership.

While Costco has long been a favorite option for shoppers looking for bargains, the pandemic has seen a wave of new and returning customers besiege warehouses to pick up large quantities of essentials during the lockdown.

But even as the world began to return to normal, the company said existing members preferred to remain a member of the program. The membership renewal rate is 92% in the US and Canada.

“In the end, we are certainly very pleased to be chosen,” said Richard Galanti, CFO of Costco, during an earnings call. However, he did not say anything about the potential increase in the cost of membership, adding: “It will happen at some point. But stay tuned."

Amazon also recently raised the price of its annual Prime membership.

Costco isn't the only major retailer considering raising membership fees. As of Feb. 18, Amazon has raised the cost of its Prime subscription from $119 to $139 per year for its US customers. The cost of the monthly membership has also increased by $2 from $12,99 to $14,99 for subscribers who do not have an annual subscription.

Prime subscribers who already had a membership before February 18th will pay the old price until March 25th. After this date, their next renewal fee will be increased. The price increase reflects "the ongoing expansion of benefits for Prime members, as well as rising wages and travel costs," company officials said.

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While it's just an add-on to the service, Prime memberships have become popular with Amazon customers, especially during the pandemic. In 2021, the company added more than 50 million new subscribers compared to the previous year, bringing the total number of paying members worldwide to over 200 million, according to The Verge.

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