Beware The Costco And American Express Membership Fee Double Dip

Last week we mentioned that Costco has a habit of backdating the starting date for lapsed membership renewals, which prompted Monica to write in and let us know of another issue they seem to have with billing. If you renew your executive membership with Costco but then apply for the Costco American Express card, Amex will charge you the membership fee a second time. Monica says the Amex CSR who fixed the problem told her it happens all the time.

Here’s her story:

I have the executive membership which costs me $100 a year. Like everyone in this boat, I get a check each year around renewal time that can be cashed out, or used at the register for purchases or membership renewal. My membership expired this past April 6, and I used my check, which was more than enough to cover my membership fee, at the register at the same time I purchased a few other things.

Around mid-May, I applied for the Costco American Express card so I could start earning even more money back on my purchases. About a month after receiving my card, I noticed a mysterious $100 on my American Express for “membership renewal.” That would mean that I double paid for the year. A couple of days later, I purchased some more items there, and the cashier informed me that my membership had expired and I would have to pay an additional $100 renewal fee in order to walk out of there with my stuff. I told her no, that I renewed in April and had been erroneously charged a second time in June and I was NOT paying a third membership fee.

The manager took my American Express, looked up my Costco member account, and admitted I had been charged twice. The only solution for the moment (as they were about to close) was to use a dummy account number to make my purchases (no cash back on those items), and come back to the store the next day to fix it. I went back the next day, and the lady at the membership counter fixed it in “Costco’s system,” but said I still needed to call American Express and request my money back.

I called them that afternoon, and they cheerfully and without question refunded my money. Then I requested to be removed from their automatic renewal system for members. And that was the key; she explained that every new American Express/Costco card comes with auto renewal attached and that the problem I experienced happens “all the time.” So if you’ve paid your dues for the year, you’ll be charged a second time for some reason. It shouldn’t be hard for American Express to disable this feature and let members opt in instead of making members opt out once they realize they’re being charged twice.

I would love to know how many people don’t catch or don’t challenge having to pay their membership fees twice a year?

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“Be Careful, Costco Backdates Renewals”
(Photo: Orin Optiglot)

Comments

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  1. italianscallion33 says:

    Very sleazy. When I got my Chase credit card a few years ago, their credit protection program was included, I think, and I had to call and cancel it on my own within 30 days in order to avoid being charged. But that info was included with the card when I got it. Not cool of Amex.

  2. Skin Art Squared says:

    Love the Costco.
    Screw Amex.

  3. Anonymous says:

    When I signed up for the Costco AMEX card a few years ago, I did it in the store at the Costco’s help desk.

    I had already paid my Executive Membership ($50/yr) a few weeks earlier, and was only charged the additional $50/yr to upgrade the account. The auto-renewals did not kick in until the following year.

    Between the Costco’s rebate check and the AMEX cash back, I get the annual membership fee back and a lot more to put in my pocket.

  4. tedyc03 says:

    I have a feeling this has to do with their billing systems. Someone isn’t sharing information with someone else and all. Not that I find that an acceptable excuse…someone needs to get smacked.

    • dragonfire81 says:

      @tedyc03: It’s highly possible they are aware of the problem but are leaving it unaddressed so they can pocket the duplicate membership fees from folks who don’t notice the double dip. Don’t think for a moment this isn’t possible.

      • Ferris152 says:

        @dragonfire81: Yeah, that was my experience in customer service for one particular company (which is much loved by it’s customers and much hated by it’s critics). The managers encouraged us never to refund any charges (legit or otherwise) unless asked, and in that event, give as little as possible. So customer’s who had been double-billed or hadn’t used the service for years who likewise didn’t know or forgot to ask for a refund got the shaft.

  5. mcs328 says:

    Well at least Costco and AMEX corrected it immediately instead of giving you the run around.

  6. nocturnal99 says:

    This all sucks, but–

    Re: the backdating, how infrequently are people going to Costco if they’re paying to join?

    I need my paper towels.

    • god_forbids says:

      @nocturnal99: I know, right? I only pay $20/year for Sam’s Club (shared account) and I’m probably in there weekly buying stuff. Can’t imagine it’s a good value if you never go.

      • Megalomania says:

        @god_forbids: you can go every couple months and still make the savings count pretty easily. Just buying a TV there (compared to at a store like Best Buy) can save you at least a hundred all in one go.

  7. Rectilinear Propagation says:

    It shouldn’t be hard for American Express to disable this feature and let members opt in instead of making members opt out once they realize they’re being charged twice.

    I hate it when companies automatically opt you in for things, especially things that aren’t disclosed.

    • sharkzfanz says:

      @Rectilinear Propagation: Most things are disclosed just in the fine print…. 99% of consumers do not read it carefully enough…

    • Megalomania says:

      @Rectilinear Propagation: it’s pretty much guaranteed you’re told when you sign up. It might not even be in the small print, but people will just forget and the next year when they’re reminded by Costco that their membership is expiring, they’ll pay it and go on. It’s also probably something that is helpful for a good number of people.

      I don’t doubt there’s no “opt out” box to check on the contract though.

  8. David Eckert says:

    Wow, thanks a million, Consumerist. We have a Costco Executive membership and the Costco AmEx as well, but we *don’t* plan on renewing. Our membership is up in two weeks; thanks for the extremely timely heads-up. I had no idea there was an auto-renew, and making sure it gets taken off now will save a lot of time and headaches in the future!

    • god_forbids says:

      @David Eckert: Oh come on. The vast majority of people probably appreciate having the auto-renewal done by AMEX and not having to pay Costco separately.

      That, and AMEX CSRs were excellent (as they always have been to me) in their response when a problem arose due to the OPs situation. Mountain =/= molehill.

  9. vastrightwing says:

    Add to this using the Costco website: if you renew a membership on the website, their system is so messed up it won’t actually renew your membership: it creates a whole new one. So you get billed twice.

    I’m sure going forward Costco will take double dipping very seriously.

  10. Jevia says:

    Yeah, I was surprised to see the auto-renewal on my Amex card last month. At least I was only charged the one time. My only gripe was that it came at the same time that Amex lowered my credit limit, so the automatica charge put me above my “new” credit limit. At least they didn’t charge me an over limit fee since it was retroactively imposed, and I’ve now paid the balance down below the new credit limit.

  11. woolygator says:

    Don’t renew your Costco membership when they come to your place of employment. I did that and they gave me 2 free months extra, However I now have been a executive member for 2 years and have not gotten my rewards yet because I haven’t received my bill yet.

  12. jaya9581 says:

    If you live in a place where there’s a BJs, consider switching to them – we’re fairly new members so we haven’t had to deal with any renewal junk, but their prices are the same or better than Costco, they have WAY more grocery items, and they are open later!

    I’ve never been a big fan of Costco’s service or renewal process. We still have that membership as well, but if we were the ones paying for it we wouldn’t be renewing.

    • BeThisWay says:

      @jaya9581:

      I’m a member of Costco and BJ’s, thanks to piggybacking on my father’s corporate memberships. What I like about BJ’s is their coupon acceptance policy. Costco does not accept coupons at all. I wewnt to BJ’s much more often when my son was born, as I could use coupons on formula and diapers and such. That said, I hate most of the BJ’s generic products (Berkeley and Jensen) and love Costco’s Kirkland brand. I also like Costco’s meat much, much better.

  13. thrashanddestroy says:

    Interesting, I know our membership system in and out and I’ve never seen that…granted I didn’t work that area for long, so who knows.

  14. outlulz says:

    I’m not really surprised. The Amex card comes with a Costco membership and their records don’t seem to be connected with Costco’s records. So if you were already signed up for a Costco membership and then signed up for an Amex Costco card you would be billed twice…

    • Jennifer Jordan says:

      @outlulz:

      I was going to reply with something along the lines of this.

      What she needs to do is cancel her Costco Membership. Her Amex Card comes with a free membership to Costco if you pay the annual AmEx Membership fee. It wasn’t a trick someone–most likely someone at Costco–failed to tell her that. The CSR probably told them it happens a lot because Costco employees don’t know how the cards work, they’re pushed to get people to sign up.

      Also their cards do not come with Membership Rewards Points, so don’t call them and get all pissy when you think you’re earning points but learn you’re earning just cash back.

      /former 3rd party AmEx employee (yes, they outsource work)

      • stunninsteele says:

        @Jennifer Jordan:

        She does not need to cancel her Costco Membership. In the case of the Costco American Express card, there is no membership fee charged by Amex. Costco bills their membership fee onto the Amex card, but there is not Amex Membership Fee. If she cancels her Costco Membership, it will cancel the American Express card.

  15. Anonymous says:

    This isn’t the standard of handling the refunding of renewal fees (or membership fees or upgrade fees for that matter). There shouldnt have been a problem with them processing a “void mem fee” and putting it back onto the Amex, its actually a very easy process. Also, when you sign up for the Amex card it states on the application that your renewal fee will be autobilled unless you opt out. The only way that you would be renewed twice is if you paid at the store and didnt ask to be taken off autobill. I am very sure that the problems Monica experienced were unique to her situation and not the standard (definitely not something that people need to BEWARE of)

  16. Mr_Mantastic says:

    Why is everyone hating on Costco? It’s the best place to shop, ever, because of their absurdly liberal return policy. My dad brought his malfunctioning pressure washer that he had purchased 8 years earlier in and they refunded him full price because there was a recall on it. 8 YEARS! He immediately bought another one. He also brought in his laptop (purchased the previous year) that Gateway wouldn’t help him with, and after the Costco employee called Gateway and got no help, they refunded that, too. He immediately bought another one. Where else can you buy a watermelon, go home, eat some of it, realize it’s bad, go back to Costco and say it was bad and you threw it away, and they give you a refund? Nowhere! They’ve been pretty awesome to our family, and these are at locations in Memphis, Atlanta, and Jacksonville.

  17. Anonymous says:

    The truth is that this is a Costco issue, not an American Express issue. On the form where people sign up, there is a box to check that says “check this box if you do not want your membership automatically charged to your card”. People overlook that and then think that American Express charges them the fee, when in actuality it’s Costco.

  18. theblackdog says:

    I did notice when I applied for their AmEx that by getting a card I agreed to have my membership renewals automatically charged to the card. My membership renews next month so I will have to watch my statement closely.

    On the other hand, they have been awesome so far about my chargeback situation from AirBaltic.