Costco Membership Renewal Lawsuit Settlement

May 15th, 2009 · 30 Comments

Costco is in the process of settling a class action suit regarding how they used to carry out membership renewal when it was more than three weeks past the renewal date.  Apparently, they used to make the membership retroactive to the date when you should have renewed, and not the date that people actually did renew.  So, if your year of membership was up on May 1 and you didn’t renew until July 1, they continued to have your renewal date as May 1 and not the new date of July 1.  And thus cheating people out of months of membership.

As part of the settlement, Costco will provide between one to three months of free membership to people who were members between March 1, 2001, and March 31, 2009, and who renewed more than three weeks late.  The settlement applies nationwide to all present and former members, and to all types of memberships.  Those who qualify have been notified by Costco.  For more information about the settlement, you can read about it on the Costco website.  As a result of this suit, Costco has updated their renewal policy: if you renew more than 60 days after the original expiration date, you will now have a new expiration date set 12 months after the most recent renewal.

The details of the settlement have gotten preliminary approval from a US District Court in New York; the final hearing for the settlement will be heard on October 16.

Boston Herald: Costco Settlement May Result in Free Membership Time


Tags: General · In the News Share

30 Responses so far ↓

  1. 1 Heidi // 2014.03.25 at 10:17 am

    So far I am out over $20,000 in increased mortgage interest for “serious delinquency” on my credit report for a Costco renewal charged to AmEx (unbeknownst to me). This ding on my credt rating moved me just out of the high credit rating which would have lowered my interest rate. I moved out of state before the membership was up. I never received the renewal bill ($32.00). I never shopped at Costco since moving out of state. I called Costco and AmEx several times over 2 years asking to remove this delinquency; each blaming the other. Last year they said, “Too late. It has been over a year so we can’t do anything.” Is there anything I can do to recover these losses? Incurring $20,000 in mortgage over time for a $32.00 renewal bill I didn’t receive is beyond frustrating and unfair.

    • 2 Dee Berns // 2014.04.07 at 9:59 pm

      I’m sorry you are discouraged and your credit was messed up. There is a way to recoup your lost $20K. Save some cash, find your lender’s method on applying extra principal payments and make some extra as often as possible. Study your Amortization Chart and watch the savings in Interest that you accrue. I bet once you’ve saved 20K, you are going to save more and your house will be yours in less years than expected.

      Good Luck

  2. 3 Ross // 2012.03.30 at 7:16 pm

    I called Costco just now. I was told that my membership expired 1/1/12. If I renewed today, 3/30/12, my expiration date will be 1/1/13. I live in the Seattle area and contacted the Tukwila Costco. Apparently, this settlement means nothing. Or am I misreading the Settlement?

    • 4 Dee Berns // 2014.04.07 at 10:09 pm

      They are wrong. Sixty days or two months after your renewal, March 2, you were supposed to be able to pay and have your renewal moved to March. I suggest you make a copy of the Costco Membership Renewal Lawsuit settlement and carry it to the store with you.

      I experienced something similar and was treated coolly. It when I quietly held my ground and referred to the lawsuit which I did not have with me, I was given the new date (from April to June) as a favor and was told that it was typed into the system “that I now understood the renewal policy.”

  3. 5 lucy // 2012.03.18 at 2:20 pm

    I do not understand. I digned up for an exceutive membership. My 2% reward check was cut 3 months before the year long membership ended. If I renew the other 3 months will get tagged onto the next years check. If I decide not to renew at the exceutive level, how do I get credit for the the other 3 months? This seems illegal to me.

    • 6 Dee Berns // 2014.04.07 at 10:22 pm

      Google and read Costco Membership Renewal Lawsuit Settlement.

      You may clarify a part of your question. I do not have a Costco American Express. Costco is fair about renewing the difference when you do not save enough to make Executive Membership worth your while.

      You always do these modifications and settlements at the Customer Service counter, otherwise your membership will revert to the original month. If you renew more than 60 days after the original expiration date, you will get the membership moved to the new month.
      Count well. 60 plus and I think you must really know your expiration date.

      Good Luck

      • 7 Dee Berns // 2014.04.07 at 10:29 pm

        Oops I meant to say fair about reimbursing the difference if the Executive Membership is not worth it. They say that at the time you get it.

  4. 8 Natalie // 2012.02.05 at 5:53 pm

    My membership expired 12.31.11. I’ve put off shopping at Costco in ’12 until today as I wasn’t sure that membership is worth it anymore as I do agree, one can get better or comparable prices on laptops, printers and TVs — as I learned this year after buying same at Costco. I do think that Costco has good prices on drugs for membership though as I recently learned.

    I dropped Executive Membership when I got my Executive Membership Reward Check several months ago — always, for some reason, this check is received months ahead of the expiration of annual membership. I dropped Executive Membership because I had not earned enough extra to justify $50 premium for Executive Membership. Beside not spending enough to justify Executive Membership, I’ve always wondered why this Executive Membership check comes months before the end of my renewal date, therefore, shorting me of Executive Membership reward benefits?

    Furthermore, when I got to the register to check out, even though I told them I wanted to revert back to standard membership, the register could only ring me up for the $100 renewal. As a result, I had to get out of line, leave my merchandise, and walk over to membership to renew, then get back in line to purchase. Not a great customer service experience for myself or others in line behind me.

    At that time of renewal today, I asked to have my renewal start today, February 5, 2012, rather than January 1, 2012; however, they would not accomodate me and the manager was less than satisfactory in her response, even though another woman who was helping me in membership at least understood what point I was making. I explained to both that I have not purchased anything since expiration on 12.31.11 as if I had, membership would have automatically rung up at time of purchase, as it has been for years — and explained I did not see why I should pay for something I had not used. Finally, I left the counter in frustration.

    I’m tempted to cancel membership for many reasons.

  5. 9 Janet // 2011.06.19 at 10:50 pm

    The date should start when you renew!! If you choose not to renew for months after your last date of membership that has nothing to do with when you start your new membership. i work in membership at costco and told management this was not right. Why should you be shorted months of membership simply because you chose to start a NEW membership at a later date. ONE YEAR MEMBERSHIP!!! From the MONTH you pay until next year at the time your membership expires. Legally AND ethically this is correct.

    • 10 Dee Berns // 2014.04.07 at 10:27 pm

      Google and read the Costco Membership Renewal Lawsuit Settlement. That should answer your questions. You actually get 13 months. Join on May 1 and your membership is good through May 31 the following year.

  6. 11 Cliff // 2010.10.30 at 6:01 pm

    I shopped at the Santa Clara, CA COSTCO today (10/30/2010) and the clerk notified me at checkout that my card expired in July and asked me if I wanted to renew. I hadn’t shopped there since June. I said yes to renew it, then I asked what date does the new renewal period starts. He said “July”. I told him I thought that there was a lawsuit about renewal dates. He asked some other COSTCO employee standing by (manager?) and was told July. They were either oblivious to the “renewal policy” to update the renewal date, or they do not conform to the terms of the settlement, or the policy has changed.

  7. 12 Jack Baker // 2009.07.28 at 8:08 pm

    This morning I went to the Santa Cruz, Ca. Costco and asked them about moving my one year expiration date to the end of May, when I renewed it two months ago. It had expired in March. During the two months of non-membership time, I didn’t go to Costco. I think I’ve renewed at the counter every spring, at least 6 weeks after the March expiry date and sometimes up to 3 months later—for at least 8 years. I’ve always paid for the new membership the first time I’ve been informed, at the checkout. At the Santa Cruz Costco the impression was given that it should be done when informed; but I never tried to slide out of it with any excuse. I’m sure one or two times I hesitated in going to Costco because I knew I owed the membership fee and didn’t have an extra 45 dollars to pay for it with my purchases. So, I waited another few weeks or so before going with my extra membership money in hand.
    I think it’s great that they have the new policy now, thanks to the class action lawsuit. One assistant manager, at first, refused to change my card to the new expiration date in May. Another manager was called and he refused at first, until I mentioned “class action lawsuit”. He called the desk right back and said, O.K, change it, and tell the manager at the membership counter that you do not need my authorization anymore to change the yearly expiration dates immediately in the computer as soon as requested. So, I helped them get this new policy going this morning, and the counter guy thanked me while we chuckled about it a little. The yearly membership fees have slowly increased over my eight years from about 30 to 50 bucks, for my class of membership. So why not get your full money’s worth ??

  8. 13 Jerry // 2009.07.16 at 8:51 pm

    To Serapio. I think what a few people on here are saying is that the option to shop was not taken away from members that did not renew. It was a very common occurance to have a person come through my line with an expired card. Usually more than a couple of months. They would promise to renew next time or would claim to have already paid. Costco’s managers and supervisors would allow them to shop and if and when they chose to renew they would complain about us not rolling their renewal date. Costco CAN see the shopping history and could tell that shopping had been done while it was expired. They were not being cheated out of anything. What if a person purchased a membership in Jan and then shopped in Feb and Mar but then bought too much and didn’t need to go again until June. They went June, July and Augusst but did not go in Sept. Then they go every month for the rest of the year. Should that person be refunded for three months? Should Costco start charging a monthly membership fee? When they are sued by a person who felt they were being cheated by weeks should they start charging weekly. Maybe daily and then if that person spends less than a couple of hours they can complain they were cheated out of minutes. Maybe Costco shopuld just become retail and then the price will go up and the quality down.

  9. 14 Dash // 2009.07.01 at 12:42 pm

    It is 100% true that the lawyers are making a killing in this case, as they usually do in lawsuits like this one.
    Instead of complaining about it, let us do what we can do. Let’s opt-out.

    Just follow the OPT-OUT procedure in the settlement document and well, at least you have the pleasure of knowing that you were not a part of something like this.

  10. 15 boiscout // 2009.06.25 at 1:08 pm

    I have been a Costco employee for 5 years. Part of my job is to do comparison shopping with other stores close to our wharehouse. IE- Sams, Kroeger, Randalls, Walmart etc. Our prices are consistantly lower than any one else around. I suggest you purchase a calculator, and get correct information before getting on your soapbox in Zellars. FYI- we sell them at Costco.

  11. 16 Serapio // 2009.06.10 at 11:47 pm

    I’m wondering if you are the brain dead person here. We’ve just come out of 8 YEARS of the Bush administration and you have the nerve to say this : “This is exactly why America is hurting economically.” That’s just insulting!

    Going by your scenario with the credit cards one would have the option to use the credit card or not.
    The lawsuit is for people who didn’t have the option of using their Costco card but where charged for the time the didn’t have an active membership.
    There in lies the problem, they didn’t have the option of use.
    It’s simple you get charged for a year you should have use for a year regardless of renewal date.
    “If it weren’t for the money generated by the membership fees, Costco would not be able to offer such low prices.”.

    You might want to start doing some comparison shopping, not everything is a deal at Costco.
    They did have a time when they had an exceptional clothing person who was buying very nice articles of clothing that the prices just couldn’t be touched, but that has since passed and the new buying person has some affinity with some very poorly designed apparel.

  12. 17 Tyson // 2009.06.03 at 3:40 pm

    I will say that I am one of the customers/members that doesn’t renew on time, I only go to the store (my wife and I), probably 3 -4 times a year, so yea I try to extend my membership to closer to a 15month deal since I don’t go that often, I will admit if I went there more I would renew on the day, but I only go once every 3 or sometimes more months,so is it worthwhile for me? no, and in reality I’m not costing them any money, I’m not buying things during that time.


  13. 18 Suzy // 2009.06.03 at 10:13 am

    I just saw how much the lawyers are getting out of this and it is shameful to say the least. Over $5 million and we get how much? $3 or $4. This is truly scandalous, truly, truly scandalous. Yeah, these lawyers went to school and probably will be paying back school loans for years to come, but this is just one case that will help them do that out of many that they do every week.

    As a Costco member that takes advantage of the executive membership because it pays for itself, I really recommend it as the best option. I’m not a huge Costco spender, but for the $100 investment and the savings I get, and there really are savings, cos I’ve done my homework and I’m a very astute shopper, I get back an average $86 at the end of the year. I know what I save is worth way more than the $14 deficit. I challenge anyone to prove differently, that Costco doesn’t save you money. At the pharmacy alone I pay $250 for my Advair, yet I paid over $300 at Walgreens and Rite Aid. That alone makes it worth $600 or more a year.

  14. 19 Paul B. // 2009.06.02 at 5:59 pm

    I just wanted to point out that Costco ONLY makes money on memberships. They only charge ” COST plus 10%” = their price. Where as everyone else like Kohls for instance takes MRSP and then deducts off of that and calls it a sale.

    Cost is equal to the value of the product that Coscto pays for it. The 10% goes towards the bills such as the electricity, water, gas, employee’s salary, share holders, etc.

    They have watches they sell that have an MSRP for $495.00 and they sell it for $99.99 what does kohls sell it for? $149.99 and they call it a sale at 70% off.. At costco that is regular price..

  15. 20 Paul B. // 2009.06.02 at 5:50 pm

    I just wanted to say.. Please Don’t ever shop at Costco.. If you don’t like it.. Costco Doesn’t need people like you.. I love the food there and I only shop for two people, (My wife and I). I spend about $7 to$8k a year there and I am an excutive member with an Amex Card. My membership is paid by rewards(CASH) I get on both cards. I even make some extra cash every year. So Costco and American Express actually pay me to use them.. 3% for gas at Coscto and every other free standing gasoline location that is not a direct competitor to Costco, 3% eating out, 2% travel, 1% at costco and everwhere else. My rebate check for Amex was $86.00 which I cashed in for cash at Costco and my Executive card I recieved $146.00. so $146 + $86= $232 minus $100 for executive equals $132 tax free dollars.

    tonyy, Costco & Amex Payed me $132 to shop with them.. Don’t shop there.. I beg you… You don’t need money.. It really does grow on trees..

  16. 21 Fred // 2009.06.02 at 12:38 am

    What is not said about this whole thing is most of the people that did not renew their memberships for a few months were still shopping on expired memberships.There were people that went for years without renewing the membership and each time they would say next time.How is it fair to the other people that renewed on time for these ones to keep shopping when it was expired.What Costco needs to do is see if they shopped during the time they were expired and then say TOUGH Luck,you still shopped so no money for you.They will not do this even though they have the means to do so but instead chose to pay all of them for it.Someone just was looking for a company with deep pockets and who they knew they could make a buck off of when they pursued this.

  17. 22 Dave // 2009.05.28 at 12:03 pm

    I agree with Jane. Personally, I think Costco is doing the nice thing in that they don’t automatically renew your membership until you try to buy something again. Other memberships (credit cards, HOA, magazines, RCA Record Club, Time Life Books, Girls Gone Wild, etc.) automatically charge you a fee (or send you a bill) on the anniversary of your membership and make you go through the effort of canceling if you don’t want to continue. At least at Costco, you stop showing up and your membership is canceled automatically and they don’t bug you about it.

  18. 23 Dave // 2009.05.28 at 11:57 am

    @Tonyy: Perhaps in your area (I’ve never heard of ‘zellers’ so I have no clue where you’re at) stuff at the grocery store is cheaper, or close enough in price that a drive to Costco isn’t worth it. But based on the surveys Kimberly has done, we have significant savings shopping at Costco for groceries compared to the popular local grocery stores here in Austin. And we find the quality is MUCH higher in the things we get at Costco. Plus, Costco is actually closer to us than all but one grocery store. Factor in that we also save significant money on medications, glasses and contacts, homewares, landscaping equipment and plants, electronics, clothing, etc. and we’re way ahead shopping at Costco. In fact, our annual rebate itself more than pays for the executive membership fees, so everything we ‘save’ is really cash in our pocket and not something that goes to the membership fee.

    The only downside is that we do need space to store the larger quantities of things you get when you purchase at Costco. If you can manage that, it seems like a no-brainer to shop at Costco to me.

    I’m impressed with ‘zellers’ if they can come close to Costco’s prices AND quality. I’ve not found any other retailer near me that can do that consistently. By all means continue to shop there! Just don’t assume your situation is true of everyone else.

  19. 24 tonyy // 2009.05.28 at 11:39 am

    Did i say IDIOT. Sorry!! I meant to say a BRAIN DEAD DOLT. People drive 20 km to save 2 cents on a dozen of lge eggs. or 1 cent on a roll of toilet paper. UNBELIEVABLE . And these same deadheads would probably scream if zellers would start asking for an admission fee to enter their stores. What costco should be doing is giving everyone 2 bucks for comming to their store.

  20. 25 tonyy // 2009.05.28 at 11:32 am

    First of all you have to be a complete idiot to pay for the priviledge of going into a store to spend your money. A COMPLETE IDIOT. You dont save anything there !!! Stuff is cheaper in grocery stores and especially when on sale.

  21. 26 Jane // 2009.05.28 at 7:47 am

    I don’t believe what Costco does is unfair. If you get charged your annual fee by a credit card company and don’t use it for three months are you going to call them and ask them to waive part of the fee? Chances are, most of these members shopped after their cards were expired and were allowed by a supervisor or manger to shop anyway, without renewing. Is that fair to the members who renew on time? Several people wrote that Costco is more consumer friendly. Maybe it’s members should be business friendly. If it weren’t for the money generated by the membership fees, Costco would not be able to offer such low prices.

  22. 27 Chuck // 2009.05.27 at 9:31 pm

    This is exactly why America is hurting economically. Let’s stop suing everyone else over petty issues. Instead of filling the pockets of lawyers and crippling the economy, why not let businesses carry out business?

  23. 28 Greg // 2009.05.18 at 12:14 am

    Well, the deprivation would come 10 months later when their 12 month membership was again expired.

    Costco usually errs on the side of its members even when it costs them money to do so, so this is something I can forgive.

    I think most people realize that a case like this generates $3 or $4 for the average Costco member, but generates millions for the attorneys involved.

  24. 29 Jennifer C. // 2009.05.16 at 10:46 pm

    I’m not sure how much this qualifies as “the right thing,” as the settlement simply clarifies that they’ll continue to backdate renewals up to the two-month mark, then extend it the full twelve months after that.
    I’m also not sure how people can say they were “deprived” of membership benefits, seeing as they obviously didn’t try to buy anything while their memberships were expired. Every time I’ve gone shopping when my membership was expired, the nice people at the register promptly let me know about it.

  25. 30 Clue // 2009.05.15 at 1:50 pm

    I’m glad they’ve finally dealt with this issue. I’m only sorry they dug their heels in until they were eventually forced to do the right thing. Costco is usually much more consumer-friendly than that and that whole policy just made no sense whatsoever in that context.

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