3 Reasons to Downgrade Your Costco Membership ASAP

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Did you know that Costco's Executive membership is its most popular option? The warehouse club giant says that 52 million customers have an Executive membership, totaling a little more than half of its memberships.

Of course, it's easy to see why the Executive membership appeals to so many people. With the Executive membership, you get 2% cash back on your Costco purchases. So even though the Executive membership costs double what a basic membership does, you might easily make back your upgrade fee if you shop at Costco often enough.

But there may come a point when an Executive membership at Costco no longer makes sense. If these signs apply to you, it may be time to downgrade.

1. Your household size just shrunk

There are different reasons why your household might shrink. Your kids could go off to college or move out. You could get divorced. And so forth. But if you're not feeding the same number of people you once were, then it may be harder to justify the cost of an Executive membership.

Your goal should be to earn cash back from that membership to cover your upgrade fee, which is currently $60 but will rise to $65 starting Sept. 1. If you're not buying as many groceries, and you also don't need to buy household supplies (like toilet paper) as often, then you could end up failing to recoup your upgrade cost.

2. You've moved and now have less storage space at home

The option to buy groceries and household essentials in bulk isn't all that helpful when you live in cramped quarters and don't have the room to store it all. If you've recently downsized to a tiny house or a home that just plain lacks pantry and fridge space, then it may not make sense to shop at Costco very often.

If that's the case, then a basic membership might cover your needs. So you might as well not spend the extra money on an Executive membership.

3. You no longer have easy Costco access

It's easy enough to do a weekly or biweekly Costco run when the nearest warehouse club store is within 20 minutes of where you live. But if you've moved to an area where you no longer have easy Costco access, then you may find yourself getting over less and less -- and understandably so.

In that case, you should probably downgrade to a basic membership, since your spending is likely to decline. Even though shopping at Costco can be a positive and rewarding experience, making a 45-minute drive each way could easily take away from it.

Don't hesitate to downgrade if that's the right move

When you call your cable provider to downgrade to a lower-tier plan, they may patch you through to a customer service representative who tries to convince you to stick with the more expensive package. Costco won't do that.

If you go to customer service and explain that the Executive membership no longer makes sense for you, they'll let you downgrade to a basic one without a hassle. Not only that, but if you didn't make back enough money through your Costco spending to recoup your upgrade fee, you'll get refunded the difference when you go to downgrade.

So for example, if you paid $60 extra this year for an Executive membership but only earned $40 back from it, at the time you decide to downgrade, you can expect a $20 refund from Costco so you're made whole on your upgrade fee. It doesn't get much more reasonable than that, which is why you shouldn't hesitate to cancel your Executive membership if it no longer makes sense to keep it.

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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.