I 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?

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dahinds 2 hours ago | parent | next [-]

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.

	▲	fundad 5 minutes ago \| parent \| next [-]
		Plus every manufacturer discount is technically advertising revenue for Costco (or any retailer). Affiliations with providers of products like insurance, bottled water delivery, checks and the credit card are also sources of revenue.
	▲	throw0101c 2 hours ago \| parent \| prev [-]
		> The fact that you earn a lot of rewards doesn't stop your membership dues from contributing to Costco's bottom line. It could also be similar insurance floats: premiums and claims generally even out, but they make their returns while they're holding people's money. (Perhaps it's explained in their financial statements, but I've never been curious enough to check.)

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jedberg an hour ago | parent | prev | next [-]

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.

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Marsymars 15 minutes ago | parent [-]

> If you have an executive membership they guarantee that you make back your membership dues.

That's not quite their policy - their explicit policy is "The Reward is not guaranteed to be equal to or greater than the Executive upgrade fee paid." - but they will refund you if you ask for it.

	▲	jedberg 9 minutes ago \| parent [-]
		Much like the In-N-Out secret menu, while it's not explicitly stated it's basically company policy.

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throw0101c 2 hours ago | parent | prev [-]

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).