Costco, the retail giant in the United States, is currently running a rare member promotion through the Groupon platform where new members can receive additional digital shopping card rewards upon registration. This has significantly increased the allure of joining the warehouse club. The promotion will expire at midnight on December 31, 2025.
Costco offers two types of memberships: the Gold Star Membership at an annual fee of $65 and the Executive Membership at an annual fee of $130. Executive members enjoy extended shopping hours and receive up to $1250 in 2% cashback rewards annually while shopping.
Through this Groupon promotion, new Gold Star members can receive a $40 digital Costco shopping card, while new Executive members can receive a $60 digital shopping card. These shopping cards can be used for in-store or online purchases.
This offer is only available to new members or past members (primary and affiliate) whose memberships have been expired for at least 18 months. It does not apply to existing members for renewal or upgrade.
Former Costco CFO Richard Galanti had previously made it clear that the company would not offer significant discounts on membership fees, only occasionally providing minor promotional benefits. This current promotion is a rare additional incentive on membership fees.
Costco’s membership base has been steadily growing. Current CFO Gary Millerchip stated in the first quarter fiscal year 2026 (corresponding to September to November 2025) earnings conference call that first-quarter membership fee revenue reached $1.329 billion, a 14% year-over-year increase. Excluding membership fee adjustments and foreign exchange impacts, revenue still grew by 7.3%, primarily due to the expansion of the membership base and more Gold Star members upgrading to Executive members.
At the end of the first quarter, the number of paid Executive members was 39.7 million, a 9.1% year-over-year increase; total paid members were 81.4 million, a 5.2% year-over-year increase; and the cardholders reached 1.059 billion, a 5.1% year-over-year increase. The renewal rates in the United States and Canada were 92.2%, while the global renewal rate was 89.7%, all slightly down by 10 basis points from the previous quarter. Millerchip explained that this slight decrease was due to the increase in online new members, whose renewal rate is slightly lower than in-store registered members, but the decline was smaller than expected, thanks to targeted communication for expiring members.
Membership fees are Costco’s main source of profit. In 2024, membership fee revenue alone reached $4.8 billion, accounting for 2% of total revenue but contributing 65% of the company’s net operating income. CEO Ron Vachris said, “The most important thing we sell is the membership card.”
Non-members can purchase certain goods through Instacart and Uber Eats for delivery but miss out on the in-store discounts, full range of in-store products, and tasting experiences.
Costco attracts customers to pay membership fees to enter the warehouse club by offering goods at a lower markup. Well-known discounted items include the $1.50 hot dog and soda combo and the $4.99 rotisserie chicken. This business model aims to establish sustainable profits on customers willing to pay for the privileges of membership rather than solely profiting from product sales.