Few American retailers inspire the kind of loyalty Costco does. People renew their memberships year after year, drive out of their way for the gas, and defend the $4.99 rotisserie chicken with genuine passion. So when the warehouse giant started rolling out a sweeping set of policy changes in 2024 and 2025, the reaction wasn’t mild frustration. It was a full-blown debate, spreading across Reddit threads, Instagram comments, and Facebook groups, with shoppers, employees, and analysts all taking sides.
The controversy centers on a clear dividing line: are these new rules a fair way to reward paying members and protect the business, or has Costco started treating its own customers like second-class citizens? The answer, it turns out, depends heavily on which membership card you happen to carry.
The Policy That Sparked the Loudest Backlash: Exclusive Early Shopping Hours
The Policy That Sparked the Loudest Backlash: Exclusive Early Shopping Hours (Image Credits: Pexels)
Costco announced that its Executive-level members would be able to shop as early as 9 a.m. in its U.S. warehouses starting June 30, 2025. This was not a minor scheduling tweak. The “VIP hour” allows only Executive members to shop from 9 a.m. to 10 a.m. on weekdays and from 9:30 a.m. to 10 a.m. on Saturdays, with doors opening to all other members at 10 a.m.
The policy started on June 30, 2025, but there was a grace period. That period officially came to an end as of August 31, and all customers were required to follow the new mandate. Costco has definitely been cracking down since the rule became official on September 1, with customers without an Executive Membership regularly being denied entry when they try to shop before designated hours.
What Happened on Day One: Scenes From the Warehouse Doors
What Happened on Day One: Scenes From the Warehouse Doors (Alan Light, Flickr, <a href="https://creativecommons.org/licenses/by/2.0/" target="_blank" rel="noopener">CC BY 2.0</a>)
Over on Reddit, shoppers shared stories of what they witnessed, including one user who described: “Day one at 9:55 [a.m.], I watched them turning people away. One guy got lippy and the manager escorted him away from the doors.” It became immediately clear the new rule had real teeth.
One customer who spoke to TODAY.com described being “stopped” by a staff member. “They are trying to pressure people to upgrade their membership,” she said. “People in line with me were opening their wallets to upgrade on the spot. I can see this eventually snowballing to certain aisles of the store being off-limits to members who don’t upgrade.” The early days of enforcement left little room for ambiguity about Costco’s intentions.
The Two Membership Tiers at the Center of the Fight
The Two Membership Tiers at the Center of the Fight (Image Credits: Unsplash)
Much of Costco’s membership fee income comes from Executive members, who pay $130 a year for Costco access and receive more benefits than Basic Gold Star members, who pay $65 a year. That $65 price gap is at the heart of the argument. Executive membership offers a few additional rewards that Gold Star and traditional Business memberships don’t, including an annual 2% reward, extended shopping hours, a $10 monthly credit on same-day Costco.com or Costco via Instacart orders, and additional value on Costco Services.
If a Gold Star member is thinking about upgrading, they’d need to spend at least $3,250 per year for the membership to start to be worthwhile. Anything below that, and they’ll end up spending more money overall with the higher annual fee. That math matters for the millions of moderate shoppers who simply don’t spend enough each year to make the upgrade pay off.
The Card-Scanning Crackdown That Started Everything
The Card-Scanning Crackdown That Started Everything (Image Credits: Unsplash)
The days of sneaking into Costco with someone else’s card began coming to an end when the retailer launched a crackdown on membership card sharing, installing scanning devices at store entrances. Costco stated on its website: “Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse.” Previously, shoppers typically only had to show their cards at the register during checkout.
For years, some consumers had been sneaking around the additional fee by sharing cards with friends to shop or to get the famed $1.50 hot dog at the food court. Costco had enough and started to bring in a membership-scanning policy to eliminate the sharing and keep things fair for those who pay to shop. Some customers were concerned this would slow down entry to the store, especially during prime shopping times, and employees at the door were taking the blowback, according to a Reddit post.
How Employees Feel About Being Put in the Middle
How Employees Feel About Being Put in the Middle (Image Credits: L-13-08-08-A.343, <a href="https://commons.wikimedia.org/w/index.php?curid=51168019" target="_blank" rel="noopener">Public domain</a>)
An anonymous Costco employee said the change was “garbage” because they’re “already being pushed too hard as it is.” Workers on Reddit aired similar frustrations about the early opening hours. Reddit threads revealed workers’ worries about tighter schedules. One employee noted their warehouse already struggles to open by 9:45 a.m., and starting at 9 a.m. could mean unfinished tasks or earlier shifts. Some locations were reportedly moving morning restocking to nighttime to cope, but workers feared this wouldn’t fully address the strain.
Other Costco employees expressed concern that non-Executive members would try to get around the rules and sneak in early, causing even more stress and chaos. This wasn’t the only backlash Costco received from workers around that period. For a company long regarded as one of the better employers in retail, the friction was notable.
The Public Reaction: Divided but Passionate
The Public Reaction: Divided but Passionate (Image Credits: Unsplash)
The news Costco shared on its Instagram page in June left customers with a lot of questions and some strong feelings. Some customers were unhappy about the change, saying the company is favoring its higher-paying members and alienating the rest. The debate quickly turned into something more philosophical: what does a membership club actually owe its members?
Since the concept of extended hours left some shoppers feeling like Costco was dividing them into haves and have-nots, some customers had fun with it. “Really tired of shopping with all the poors,” one commented sarcastically. “I’ll be expecting mimosas and passed hors d’oeuvres,” another wrote. Not everyone was bitter though. Some Gold Star members saw the logic in the tiered system, pointing out that if access matters more, the upgrade is available to anyone willing to pay for it.
The Business Case Costco Is Making
The Business Case Costco Is Making (Image Credits: Unsplash)
Membership fees account for the lion’s share of Costco’s profits and provide the necessary margin buffer to undercut other retailers on price. Even though Executive cardholders account for less than 49% of paying members, their purchases totaled 74.3% of net sales for Costco during the fiscal first quarter of 2026. That is a striking imbalance, and it explains a great deal about why Costco is willing to tolerate the backlash.
Costco’s early-access benefit for Executive Members represents more than a customer perk. It’s a calculated application of behavioral economics. By leveraging exclusivity and loss aversion, Costco creates perceived value that can justify the $65 premium between membership tiers, particularly targeting time-conscious shoppers who value convenience and are willing to pay for it. The company isn’t being sentimental. It’s being strategic.
Membership Numbers Tell a Different Story Than the Complaints
Membership Numbers Tell a Different Story Than the Complaints (Image Credits: Flickr)
Despite all the controversy and fee increases, 68.3 million people held individual memberships by the end of fiscal 2025, an upsurge from 63.7 million in 2024 and 58.8 million in 2023, according to Costco’s annual report. Costco boasted a membership renewal rate in the U.S. of about 92% and a global renewal rate of around 90% at the end of fiscal 2025. Whatever frustration shoppers are voicing online, the majority are still renewing their cards without hesitation.
At the end of fiscal year 2025, business looked good for the retailer: net sales jumped 8%, and membership fee revenue climbed 10%, due to new sign-ups and fee increases. With management seeing evidence of membership upgrades a little over a month after firmly implementing its special shopping hours policy, there was little question this controversial policy change was here to stay.
Is the Upgrade Actually Worth It? The Math Matters
Is the Upgrade Actually Worth It? The Math Matters (Scarlet Sappho, Flickr, <a href="https://creativecommons.org/licenses/by-sa/2.0/" target="_blank" rel="noopener">CC BY-SA 2.0</a>)
New in 2025, Executive members also have exclusive access to early shopping hours and a $10 monthly credit on eligible same-day Costco.com or Costco via Instacart orders. The biggest advantage to upgrading is the 2% reward, which amounts to an additional 2% discount on almost everything Costco already sells at low prices. Paying more for the Executive Membership makes sense only if you’re going to spend enough at Costco to justify the additional $65 a year.
Gold Star members can upgrade at any time, and at no risk. Anyone who upgrades and isn’t happy with that decision can revert to a Gold Star membership after the fact and get refunded the difference. A second carrot was added for Costco’s Executive members on June 30, 2025: the company’s highest-tier cardholders would receive a $10 monthly Instacart credit for same-day online delivery orders above $150 in the U.S. and Canada. For frequent shoppers, those credits add up.
What the Argument Is Really About
What the Argument Is Really About (Image Credits: Unsplash)
Some shoppers think the changes make total sense. Others feel the rules have gone a step too far, turning a beloved members-only experience into something that feels a little more like a class system. That tension reflects something larger: people go to Costco expecting a certain kind of egalitarian bargain, where everyone in the parking lot is essentially equal once they flash their card. That assumption no longer holds the same way.
It’s important to recognize that Costco’s recent Executive member policies don’t take perks away from Gold Star members. Costco didn’t cut its store hours for Gold Star shoppers. It simply added hours where Executive members could shop exclusively. If Executive members increasingly take advantage of Costco’s early shopping hours, it could lead to smaller crowds later on. In that scenario, everybody wins. Whether that argument lands depends on how personally someone takes being told to wait outside.