6 year Costco employee checking in here.
The memberships are kind of a nit-pick when it comes to my employer. I actually work in the bakery, but I have helped out in various depts. and have talked to most of my managers to get the feel of just how Costco works.
From my understanding, Costco’s markup is very small, ranging from 1% to about 10%, with the average actually being between 1%-4%. So if we go with 5%, we only make about about a buck on each DVD sold. We get good deals from vendors (Sony, Toshiba, etc) because we buy in bulk. As most of you know, Costco has a very good return policy. We are told to accept any return, no questions asked. We actully had a person return a lawnmower that was like 15 years old. Costco exchanged it for a new one. The complaint was that after 15 years, it simply stopped working. I wonder why.
What Costco really cares about are your membership fees. That is where Costco makes 99% of their money. If you pay for a regular membership, or better yet, an executive membership for $100 anually, every penny goes to Costco. Costco hates it when people share memberships because they are losing out on potential dollars. As an employee, I can get fired for rounding up my friends and having them all shop on my membership (Unless they are all under my household). The reasons are two-fold: One, the company loses on the lack of additional memberships. Two, employees get free executive memberships, which yield a 3% return, with an annual limit of $500. Some employees in the past have schemed to get this limit, and have thus gotten fired.
Costco will also not adverstise that it is against the law for us to charge a fee to access goods that are federally regulated, such as our pharmacy, alcohol, and cigarettes. You do NOT need a membership to purchase any of these items. Most of our employees and managers are ignorant of this, so it’s always amusing to see a customer roll up to the cashier with a crapload of alcohol and no membership. By law, we have to sell you the alcohol. So you can enter a Costco building without having your membership card “checked”. Just tell them to step aside because you are there to use the pharmacy, buy cigarettes or alcohol.
To keep in flow with the discussion, this is what I would do as a single person (and what Costco hates!):
If you can, round up 4 people to, ahem, live in your household.
Split a $100 executive membership, so you each pay $25. Each time you use that membership, you get 3% rebate, which they mail to you in the form of a check every year. If each of you spent about $875 per year in goods, you would each get your $25 back in form of a rebate, therefore making your membership free. This, of course, can only be done if you are all under the same household, per Costco rules.
On a further note, customers were upgrading their computers using our lenient return policy every 1-2 years, so we put a limit on 12 months for computers. But even with 12 months, some people still go crazy with it.
If you are single and live by yourself, Costco might be a stretch for you, but you can still make good on items such as toiletries, clothes, CD’s, DVD’s, etc.
But if you are single with multiple roommates, it is definitely worth it to combine your efforts and shop at Costco.