Today I Got My Costco Reward Check

Our Costco reward check arrived this week. It’s for $109 and change. Last year it was around $110. We have an Executive membership which has cost us $100/yr but is going up to $110/yr.

The Executive membership gives us a 2% reward on pretax purchases at Costco warehouses. It does not include purchases of Costco cash cards or gas, something I was unaware of until I read the fine print on the back of the check. This means we spent around $5,450 on non gas and non cash card purchases. That’s a LOT of meat!!

In a previous post I wrote about buying Costco Cash Cards online in order to get United miles. This still makes perfect sense, if you aren’t an Executive member. But do I want to forego the 2% cash reward for the miles?

If I continue to pay almost exclusively with Cash Cards I buy online, our reward checks going forward would be greatly reduced – certainly below $55 and probably closer to $10 or less. And, in order to justify the Executive membership, which costs $55 more than the Gold membership, our reward check has to be more than $55.

If I decide to forego the 2% cash reward in favor of United miles, I will continue to buy Cash Cards online and I will downgrade our membership from Executive to Gold. The Gold membership costs $55/year (up from $50/yr). If I decide I’d rather have the 2% cash reward I won’t downgrade my membership and I will only buy Cash Cards for our gas purchases, which don’t count towards the cash reward, anyway. In this scenario, if and when our cash reward dips below $55, I will downgrade. (Update: see comment from Andrew below. He says you are guaranteed a minimum rewards check from Costco of $55.)

What to do? What to do?

I think I will hold on to our Executive membership. I value money over miles and, in this situation, it’s 2%. Plus, it’s easier to keep using our Costco American Express than trying to keep enough Cash Cards handy to cover all our purchases.

27 thoughts on “Today I Got My Costco Reward Check

  1. I have my reward gift certificate but am not near a Costco store. Is there a way to use or redeem this check?

  2. I am thinking of signing up for Costco executive membership. Something I could not get clarity from Costco is: the 2% reward is NOT given on purchases of Cash Card, but it SHOULD be applicable to purchases made with Cash Card. Can you please confirm whether purchases made WITH cash card (and of course, presenting the costco membership card) are counted towards 2% rewards? Thanks!

    • Noris,
      I don’t believe purchases made with Cash Cards qualify for the reward, even if you present your membership card. I’m not 100% certain and I didn’t keep track of things for the few months that I was using Cash Cards as you describe. I have recently read, numerous times, that if your increased reward with the Executive membership doesn’t cover the increased cost of Executive membership Costco will refund you the difference. So, there’s no risk in upgrading. Let me know what you discover. Also, I’m curious as to why you’re purchasing the Cash Cards. I used to do this when I could use the Vanilla Visas and get lots of miles. What kind of reward are you getting purchasing the Cash Cards that’s better than getting the Costco reward and American Express reward? Just curious.


  3. I was denied Amex card recently mainly because of a short credit history in US, hence I believe I wont be able to get/use a Costco amex card. Using just the debit card or cash does not earn me any points. But using my other Credit cards for cash card purchase does give me some cash back. Hence, wondering if purchasing with Cash card would prevent me from getting the executive reward.

    • Personally, I wouldn’t upgrade my membership to Executive right now. I’d see what happens using the cash cards and then make the decision. But, if you do upgrade and find that you don’t earn enough reward to make it worthwhile, you can always ask them to downgrade you and ask for the difference back. It’s just a bit more of a hassle. I do think your plan of buying cash cards with other credit cards, in order to get points or rewards on those credit cards, is a good one. At some point you’ll be able to qualify for the Amex card. Good luck!

  4. So all this while I have been using my debit card with my Executive membership card, are you saying I have not been accumulating the 2% rewards??? Oh lawd!!!! I only recently started using the AMEX Gold Delta Skymiles card like a month ago. I have been an executive member for close to a year now. Also, when do they mail out these checks?

    • I could be wrong. At the moment, I can’t recall exactly how it works. It’s been awhile since I focused on it and the details are a little fuzzy (hint – never assume you’ll remember ANYTHING). I think the checks are mailed out around your anniversary date.

  5. Who is Marjorie and why was she answering these questions with “I don’t know”, and ” I’m not sure”. Someone should be answering these questions that works for Costco!

  6. Best Costco Shopping Spree I’ve ever had – $105 of goods for $10.
    Yesterday, I used both my AMEX Costco OPEN Rewards Certificate (nearly $56) *and* my first-year Costco Executive Rewards annual certificate (which was just under $40). I use my AMEX Costco card at more places than just Costco. So I purchased more than $105 worth of merchandise, for just $10 out of pocket. (Needless to say I threw that on the AMEX Card – working on next years’ bonus.
    WARNING: As I first year member, I didn’t realize the AMEX Costco certificate was snail-mailed in an envelope so I nearly threw it out (but AMEX offered to replace it). It’s good for 90 days, I believe. The Costco Executive Rewards certificate does not expire (I confirmed this in-store) but if it is lost/stolen it can not be replaced.
    Now next month, my Executive Membership fee of $150 will hit. In my shopping there, (not including cash purchases – which do not earn AMEX Rewards, of course) – I nearly received my membership fee back. I am a Costco fan, but before the AMEX Costco OPEN Rewards Card, I was using my personal AMEX Delta Gold to rack up miles.
    Anyway, after one year of AMEX/Executive membership (the AMEX card has no annual fee as long as I remain a Costco Exec Member). I’ve been very pleased so far – but $150 is a lot to justify. So I’m glad I nearly earned it back. Thoughts?

  7. FOLLOW UP – The Costco Executive Membership is $110 (not $150). Oh, so I really scored. Plus I got Executive level benefits all year. This deal worked for me.

  8. I just recently got my Costco rewards check as well. I just wonder if I have to use all the rewards at once or I can use it for separate payments.

    • When you are checking out, if your purchase is less than the rewards check amount, you will get the remainder in cash.

  9. While cleaning, I found a Reward Gift Certificate dated June 2013. Is it still good? Do these certificates expire? And since it’s for $53.00, are you saying I’m not getting my money’s worth out of the Executive Membership? Thanks.

    • Is there an expiration date on it? Even if there is, I would present it and hope/expect that they would honor it. If it’s your Costco Executive Membership reward certificate then you are not getting your money’s worth and should consider switching back to the Gold level (or whatever they call it). My understanding is that Costco will reimburse you for the difference. Not sure if they prorate it. If, however, it’s an American Express reward coupon for the True Earnings American Express card, that’s a different animal and it has nothing to do with your Costco membership level.

  10. Hi Morjorie,

    Learn the rules of the game first!
    If you have an executive membership, you are guaranteed a reward certificate amount equal to the difference in your rewards accumulated and your $110 membership. So if you’ve only accumulated $5 of rewards at Costco, your reward certificate should be a sum of $5 + $50. In short, if you spend nothing at Costco during the year, you’ll get $55 back at the end of the year, the difference it was to upgrade to executive. This means the only thing really on the table is the base membership cost of $55, and the opportunity cost of having $55 in cash around the time of signing up your membership. So in your post’s example, you actually spent $5,450 / 2, or ~$2,725 (verifiable by reviewing your yearly statements) at the warehouses!

    Also note that with a cash card, you can purchase things at Costco without any membership at all (gas and warehouse items). To get in, just flash the cash card on your way in.

    With this in mind, to solve your dilemma ask yourself if you shop at Costco enough to enjoy it!
    If you shop at Costco enough to merit the $55/year membership and don’t need the extra $55 in cash for whatever reason, then go for the Executive membership (for people with really tight budgets, $55 available at any given time could be big, but given how you’re gunning for airline miles, I doubt that’s the case).

    Given your budget constraint (disposable income) for groceries or whatever you use for your United Airlines card, where do you spend your money more and which gives you the higher conversion rate (as you’ve already noted, at Costco, sans gas and gift cards, you earn 2%). Compare the 2% rewards at Costco to whatever rate your airline miles rewards are (miles per dollar, and a very fair conversion rate of your redeemed miles to dollars, as some mileage redeemed trips can be worth it while others not so much). The result yields some possibilities for you:

    1. If the 2% cash back rewards and your spending at Costco is greater than your United Airlines travels + the enjoyment you get out of traveling that many times a year (you can roughly calculate how many miles you expect to earn in a year ahead of time), drop the United Airlines card and go with Amex and you can fly on your savings earned at Costco. Of course, you lose the flexibility of mileage on volatile flight costs, so this is better suited if you don’t fly very often.

    2. If you don’t like shopping at Costco other than for the occasional item, less than roughly $2750 a year (calculated by base membership $55 * 50 = $2750 sans gas and gift cards in a year. It’s the amount you’d have to spend to earn $55 in rewards, or to cover your membership, as your Executive is technically paying for itself), you can drop the membership all together and put that $2750 you would have spent in Costco into your Mileage Rewards program and shop solely with cash cards at the pump or for the occasional item at Costco!

    3. A combination of the two (and this is most likely the most optimal solution): Keep the executive membership, rack up your rewards at Costco while earning at the gas pump through your cash cards purchased online with your Airlines card! There are a lot of reasons to shop at Costco rather than at other places that’ll end up boosting your buying power for the year!
    Their no-question’s return policy on everything but TV’s, computers, etc. (restricted to no-questions within 90 days, still much better than competitors, and don’t forget free or very low cost extended warranties/support!) is very powerful. If you can get used to getting more of your groceries at Costco, that’s also another great thing that’ll increase your spending power; Costco’s rotating selection of goods ranging from budget to luxury are for the most part very well priced; and so much more! Tires, reducing the amount of stops you’d have to go to shopping outside of Costco, consumer-corporate ethics are great, as employees are very well taken care of and the stock is a great pick in any portfolio, etc.!

    Have a nice day!

    • Thanks for your helpful comments, Andrew. I didn’t know Costco guaranteed a $55 reward check. I’m not sure I understand why you say I spent only $2,725 vs. $5,450 at the warehouses. $109 (my rewards check amount) is 2% of $5,450. And I’ve never received a yearly stmt from Costco and I don’t see where I can access this info online. I use my American Express for about $7,500 worth of purchases/year, of which about $2K is for gas and the rest is at the warehouses. I use it for nothing else. (I got out of the habit of buying cash cards online when I stopped being able to buy Vanilla Visas and get 5x points. But I really should still buy them to earn the approximately 2,000 miles I’m missing out on.)

      I like your idea of just using a cash card to get into the store and to pay for purchases. I would consider doing this if I didn’t need a membership number in order to purchase them online.

      As for making a choice, I need the flexibility the miles offers. Almost a year ago, I used 325,000 miles when my Dad got sick. I flew round trip Denver/Calgary three times in three weeks. And my husband and kids came out the last time, for his funeral. The flights would have cost us something like $13,000. Plus, I like Costco. I like the products and the prices. So, option 3 is right for me!


  11. So Marjorie, have you confirmed (by checking the amount of the year-end reward check) if using a Costco Cash card will still get you the 2% executive rewards?
    The Costco web page for the executive rewards does not mention that you have to use the Costco credit card (currently still AMEX) for purchase in order to earn the rewards. It seems to be the only requirement is the executive membership not a credit card membership.

    Also, if you buy Costco stuff via Google Express, which allows you to use any credit card, Google explicitly says that you’ll still earn the 2% executive rewards.

    So it seems to me that it’s safe to assume that we can use Costco Cash Card and still receive the 2% executive rewards. Of course you have to let them scan your membership card first at checkout.

  12. Pingback: Costco American Express Money Back | Fashion Bug CC

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