The Costco Payment Rule Everyone Must Know Before Shopping

Before you start planning for cheaper steaks, affordable gas, and all of Costco's famous staples that taste homemade, you should know about a major payment rule when shopping at the store. While the wholesale club is accessible to members, if you plan to pay with an American Express card, you might need to shop elsewhere (or use another payment method).

Costco's American Express embargo wasn't always in place. Between 2000 and 2016, the two companies had an agreement to work together. However, American Express has higher processing fees than most credit card companies, which often results in higher prices passed along to consumers. Given that Costco's entire business model is based around members buying bulk goods to save money, it elected to end the agreement and stopped accepting AmEx credit cards in March of 2016. That same year, Costco and Visa entered into an exclusive agreement, creating the Costco Visa Anywhere Card, which offers cash back on Costco purchases like gas and in-store purchases. Accordingly, Costco warehouses accept all Visa cards, as well as most debit/ATM cards, cash, checks, EBT cards, Costco Shop cards, and select other payment methods; you can also use MasterCard when making online purchases.

While Costco is a fairly relaxed business and honors some truly outrageous product returns, even it has its limits. The rules are by no means draconian, but some semblance of order is required to maintain the company's business model, and violating those rules can get you in a bulk order of trouble.

Costco takes its members (and memberships) seriously in an effort to provide affordable products without sacrificing quality. As such, there are a few shopping rules you should keep in mind if you want to maintain access to all the affordable groceries and home goods.

The most common reason Costco revokes memberships is an abuse of its return policy. Costco allows you to return almost any product with no time window and not even a receipt required. While it's happy to accept returns on bad meat, sub-quality furniture, and even a half-eaten cake, there are limits. It wouldn't, for example, accept a mattress you'd slept on for 10 years, anything used for illegal purposes, or something you yourself broke outside of its warranty. While the return policy is generous, attempting to abuse it may put you on corporate's radar and lead to revocation of your membership.

Additionally, attempting to use someone else's membership used to be a sneaky self-checkout trick, but Costco's more strict about it than ever. With scanners at the front of the store and some locations even asking customers to show government ID alongside their membership cards, it's next to impossible to get in without your own membership. You can still bring along two guests as part of your shopping trip, but you won't get away with handing your card over to someone else anymore unless you're present.