Here's How to Downgrade a Costco Executive Membership

A Costco Executive membership is a good deal if you shop there often. For $120 per year, $60 more than the cost of a Gold Star membership, you'll earn a 2% annual reward on qualified Costco, Costco.com, and Costco Travel purchases. You can earn up to $1,000 per year this way.

Lots of members take that deal. At the end of last year, nearly half (45%) of Costco members had Executive memberships.

But what if you're not earning enough to make back the $60 upgrade fee? Costco makes it easy to downgrade, and it will even make you whole on what you paid.

How to downgrade a Costco Executive membership

To downgrade a Costco Executive membership, visit a Costco warehouse and go to the membership counter. Ask them to downgrade your membership. They may try to convince you to keep it -- Costco is known for pushing its Executive memberships. Just make it clear that you want to downgrade, and they'll do it for you.

Costco has a 100% satisfaction guarantee, including on its memberships. If you downgrade before you've received your 2% annual reward, you'll get your $60 back. Any rewards you've earned will be forfeited since you're not keeping the Executive membership.

If you've already received your 2% annual reward, Costco will deduct that from your refund. For example, if you earned $30 in rewards, it will refund you $30.

You won't receive a refund if you earned more than $60 in rewards. In that case, you've already come out ahead on the cost of the Executive membership. Since it's saving you more money than you're spending on it, you may want to reconsider downgrading, unless you won't be shopping at Costco as much.

Which Costco membership is right for you?

It's easy to decide whether you should get a Gold Star or Executive membership at Costco. The magic number is $3,000 in Costco spending every year, which averages out to $250 per month.

If you spend more than that, you'll earn more than $60 in rewards from an Executive membership. That would make it worth the money, since you're only paying $60 more for it. If you spend less than $3,000 at Costco every year, then you should stick to a Gold Star membership.

Whichever option you choose, you can also earn rewards at Costco using cash back credit cards, as long as they're Visa cards. This is a good way to stack rewards if you have an Executive membership or to earn at least some cash back if you don't.

Keep in mind that while most Costco purchases qualify for the 2% annual reward, some don't. You can get information about all the exclusions in the Executive membership terms, but here are a few examples:

• Gas
• Tobacco products
• Costco food court purchases

If Costco is one of the places you shop most often, then an Executive membership will probably be worth it. And remember that you can see for yourself risk free. The worst thing that could happen is that you don't earn at least $60 back. If so, you can just downgrade and get a refund.