These 4 Costco Perks Could Save You Thousands

A basic Costco membership costs $60 per year and the Executive level costs $120. But how much is a Costco membership really worth? It's fair to say that many Costco members get significantly more value from their memberships than they paid for them, and in some cases, the annual savings could even be $1,000 or more. Here are four of the biggest Costco perks, and how they could potentially save you hundreds, or even thousands of dollars.

1. Costco gas

Many people (especially those who aren't yet Costco members) are often surprised that you can financially justify a Costco membership if all you do is buy your gas from the retailer's pumps.

Most reports indicate that Costco gas is at least $0.20 per gallon cheaper than comparable gas stations in the same area. And based on the average number of miles driven annually (13,476 miles) as well as the average gas mileage of U.S. vehicles (25.4 miles per gallon), this means that the typical driver would save about $106 just by purchasing their gas from Costco. If it's a two-driver household, the potential savings could be doubled.

2. Executive membership

Sure, the Costco Executive membership will cost you more money initially. You'll pay a $120 annual membership fee instead of the regular $60 fee, but if you shop at Costco regularly it could be a major financial benefit.

The most significant benefit of the Costco Executive membership is an annual 2% reward on qualifying Costco purchases.

I'll spare you the math. The breakeven point is $3,000 in annual Costco purchases. Upon spending this amount, you'd have a $60 reward that can be used at Costco and would justify the higher cost of Executive membership. Any spending above this amount would be a bonus.

Costco limits the benefit to a total reward of $1,000 per year ($50,000 in spending), but even the average shopper could get hundreds of dollars from this perk. According to Mint, the average family of four spends $600 to $1,200 per month on groceries. Throw in some non-food Costco purchases, and annual spending could quickly soar into the five-figure range.

3. Costco Travel

Costco Travel offers hotels, cruises, and vacation packages to members, and to be fair, the jury is still out on whether they are cheaper through Costco than other discount travel sites like Expedia. However, there are two main reasons why Costco Travel could be a far better value.

First, Costco typically offers extra perks compared with its competitors. For example, Fodor's found that Costco's cruises offered onboard credit equal to about 8% of the fare paid, on average. And there are Kirkland Signature deals that can be much cheaper for select cruises.

Second, Costco Travel offers additional benefits and discounts to its Executive members. For example, a current offer gives Executive members an additional $100 resort credit on certain resort stays. And don't forget that Executive members also get 2% back on purchases, including travel packages.

4. Pharmacy

If you take prescription medications regularly, Costco's pharmacy benefits could put some money back into your checking account. According to Costco's website, the Costco Member Prescription Program offers medications at prices ranging from 2% to 40% less than the competition. Consumer Reports has also found that Costco's pharmacy is cheaper than other national pharmacy chains. Costco even offers pet medications, and I can tell you firsthand that they're likely to be much less than what you'll pay at a veterinarian's office.

This is on top of the in-store savings

As a final thought, these four perks could certainly combine to produce savings in excess of $1,000 for Costco members. However, keep in mind that they are in addition to any savings you receive from buying products in Costco stores. While it's sometimes tough to quantify the savings versus traditional grocery stores simply because you're buying in such large quantities, I've estimated that I save roughly 20% on things I buy at Costco on average, compared with my local grocery store.