5 Reasons Costco Could Terminate a Membership

If you like Costco, the last thing you'd want is to lose your membership. While this is uncommon, there are ways that shoppers get their memberships revoked.

Like many membership clubs, Costco reserves the right to terminate memberships at any time, including without cause. Now, it's not something you need to worry about too much. Costco is known for having excellent customer service, and it's not going to blacklist a member for no reason.

But to make sure you don't run into any issues, it helps to know why Costco would terminate a membership. Based on online reports from Costco employees, here are the most common reasons.

1. Ignoring the receipt checker

Not everybody likes it, but the receipt check is part of shopping at Costco. There are a few reasons Costco checks your receipt when you leave, including to verify that you weren't undercharged or overcharged.

Some members who bypassed the receipt checkers have had their memberships revoked. Even if you're in a hurry, the receipt check doesn't take long, and it's one of the terms of membership.

2. Being rude or abusive to employees

As one would expect and hope, any type of hostility toward employees could lead to a loss of membership. That includes insulting, cursing out, and physically attacking employees. And according to reports by employees, those types of incidents have sadly all happened at Costco warehouses before.

3. Theft or fraud

Here's another one that doesn't need much explanation. If a Costco member is caught shoplifting or committing any type of fraud there, they'll likely have their membership canceled. Most retailers have loss prevention and fraud detection systems in place to catch criminals. Costco also has an advantage in tracking down thieves, since it can look up their membership information.

4. Abusing the return policy

Costco is known for having an extremely flexible and generous return policy. It offers a risk-free 100% satisfaction guarantee. That means you can return most items at any time, no matter how long has passed since you made the purchase, and get a refund to your credit card or bank account. There are some exceptions, most notably electronics, which have a 90-day return period.

It's fine to make the occasional return, including on items you've had for a long time. But shoppers who take it to an extreme may lose their memberships. Here are a few examples of what a Costco manager could frown on:

• Shoppers who make a habit of buying, using, and returning the same products. One employee mentioned a member who was banned after returning eight TVs in a row, each of them right before the end of the 90-day return window.
• Shoppers who buy seasonal or holiday products and return them when they're no longer needed. Some treat Costco as the place to get free rentals of holiday decorations or summer patio furniture.
• Shoppers who return partially used items. Some customers have returned a small remainder of food and beverage products.

Costco almost always gives a warning to those it suspects of abusing its return policy. If the member continues making those types of returns, they may not be a member much longer.

5. The revolving door membership

Wondering what a revolving door membership is? Well, Costco's satisfaction guarantee also applies to memberships. If you're not satisfied, it will cancel and refund your membership at any time.

A select few have seen this as a personal finance hack to get an infinite Costco membership for the price of a single year. Here's what they do:

• Sign up for Costco and pay the $60 membership fee.
• Cancel within 12 months and get a fee refund.
• Use the money from the refund to buy a new membership.

It's OK to cancel a Costco membership and decide to come back later. But if a shopper seems to keep getting dissatisfied after 10 or 11 months of using their Costco membership, a manager could add a note to not let them sign up anymore.

It's easy to keep your Costco membership

All the reasons that Costco would terminate a membership are blatant examples of bad (and sometimes illegal) behavior. If you're a normal Costco shopper, you'll be able to go there as long as you pay your membership fee every year.