Costco, a well-known warehouse-style retail chain in the United States, charges an annual membership fee of $65/$130, which allows customers to shop at their stores and enjoy benefits such as discounted fuel. However, many people are unaware that there are some drawbacks to filling up at Costco.
It is widely known that Costco is a great place to buy bulk goods at lower prices compared to other major supermarkets, with a guarantee of quality. The same applies to Costco’s gasoline. Research results show that Costco gasoline ranks first among over fifty low-price gasoline brands in the United States. In Taiwan, Costco also offers relatively low fuel prices.
According to a report by FOX40 in October last year, Costco provides Top Tier gasoline. The Top Tier website describes it as a recognized high-quality fuel performance standard developed by leading car and heavy equipment manufacturers. Top Tier gasoline contains a higher level of detergent additives than what the Environmental Protection Agency requires in gasoline, helping to keep engines clean and reduce deposits on fuel injectors and intake valves. This type of gasoline can improve engine performance, vehicle responsiveness, speed, and fuel economy.
However, like any other thing, there are always two sides to consider, and filling up at Costco has some overlooked flaws.
One potential downside is that filling up at Costco can lead to impulse shopping. Many Costco members do not just stop for gas; they often end up going inside the store before or after filling up to see what they can buy. This can easily result in leaving the store 30 minutes later with a $100 credit card bill, negating the savings made on gas or even exceeding them.
If a Costco gas station is conveniently located near your residence or on your regular commuting route, then filling up at Costco could be the most cost-effective option. However, if you need to make a special trip just for gas and there isn’t a Costco with a gas station nearby, it might not be as economical.
In Taiwan, Costco only has gas stations at three locations: Zhongli, North Taichung, and Xinzhuang.
Some gas stations offer significant discounts if you pay with cash. If there is a nearby gas station with this practice, it might be cheaper to fill up there with cash compared to buying gas at Costco. You can use apps like GasBuddy to compare fuel prices in your area and determine which option is more reasonable.
Even if Costco offers the cheapest gasoline, it’s essential to consider the fuel consumption based on the distance you have to drive before filling up.
Additionally, be prepared for long lines at Costco gas stations.
One of the main benefits for Costco executive members is getting a 2% cashback on purchases. However, some purchases, including gas, may not qualify for cashback.
If you have a Costco co-branded credit card, such as the Citi Costco Anywhere Visa Card in the United States, you can get a 4% cashback on gasoline purchases of up to $7,000 per year, and the cashback lowers to 1% after that amount.
In Canada, to fill up at Costco, you need a Mastercard. With the CIBC Costco Mastercard, you can earn a 3% cashback on gas purchases, up to $5,000, and 1% afterward.
Please note that cash payments are not accepted at Costco gas stations; you can only pay with a credit card, either Visa or Mastercard, depending on the country. In addition to credit cards, you can also use a Costco cash card.
(This article referenced a report from the finance website The Motley Fool.)