Be Careful, Costco Backdates Renewals
If you let your Costco membership lapse, then 2 months later renew it, Costco will backdate it to day it lapsed instead of the day you renew. The result: your 12 month membership suddenly shrinks to 10 months for the same price. Consumer Reports notes that Costco used to backdate renewals by as much as 5 months before a recent class-action settlement.
Under the terms of the settlement, Costco will continue to backdate renewals but only by 2 months or less. In addition, if you were on the receiving end of a truncated renewal period between March 2001 and March 2009, Costco will automatically credit your membership by extending it from 1 to 3 months, depending on how badly you were screwed.
But Jeff Blyskal at Consumer Reports points out that the best way to protect yourself from any truncated renewal is to ask the Costco clerk to date it correctly when you renew:
[Costco] told me that customers renewing expired memberships can ask that the back-dating policy be waived. "Because of the membership-based nature of the Company, our local warehouse managers are vested with substantial discretion to accommodate member requests in a wide variety of contexts, based on the facts and circumstances. Our policies help guide the exercise of that discretion but do not strictly dictate all outcomes," said John Sullivan, Costco's associate general counsel, in an e-mail.
Blyskal did just that, even without the Costco lawyer's recent approval: "When I renewed [last] November I asked that my renewal be dated as of the actual date of renewal. The counter clerk at Costco customer service was happy to accommodate me."
"Costco's renewal rip-off" [Consumer Reports Money & Shopping Blog]
(Photo: Orin Optiglot)
Post a comment
Comments:
This is not unique to Costco. Sam's Club used to do the same thing.
To be honest, the only reason I renewed my Sam's Club membership for last year was because someone sent me a Wal Mart gift card that I didn't want to use at our new Super Wal Mart. Sure, Sam's has free samples and lots of giant-sized items, but the only thing that we ever saved money on was diapers.
I did not renew this year.
@ZManGT: That's what it sounds like unless there is something to lose by getting a new one instead of renewing.
@ZManGT:
I believe it would boil down to the return policy for items you've already bought. Costco offers a lifetime return policy for some items (non-electronics). It would stand to reason that this privilage would expire with your membership.
@lincolnparadox: Huh, I was just about to post that Sam's doesn't do this. I'm forever late renewing my Sam's membership and the renewal always starts on the date that I remember to stop at the desk and write them a check. I've never seen it backdated, in 15 years.
@ZManGT: That's exactly how I handle both my Costco and BJ's memberships. I never renew them when they expire. I wait until the next time I go there to purchase something and then renew it. I always make sure that the new expiration date is for 12 months from my renewal date.
There have been times where I didn't go to one of them for several months after my membership expired so I look at it as wasting those months if I had renewed right away.
@verucalise-T minus 16 days: I got around that once. They charge a new account fee, which is of course why you want to renew rather than open a new account. Instead of asking for a backdate renewal waiver, try asking them to waive the application fee (or whatever they call it.) Combine it with some story about how your auto insurance towing coverage is much cheaper, but you're rethinking joining AAA anyway, and maybe they can throw something in to seal the deal. Worked for me (once).
I'm not sure how evil this is, really, assuming the practice is disclosed in the membership agreement. Costco doesn't give you back money if you don't go to Costco for a couple of months while your membership is active, and presumably you're renewing an annual membership and not buying a brand new annual membership each year. If you'd paid on time, it wouldn't have been an issue.
@humphrmi: But they harass you constantly for the three months before it expires to "renew it now". I am not giving them the money for three months even if they were going to place the new renewal for a full 12 months after the expiration date. I never bothered to ask if you renew early if you lose that last 1-2 months left on your old year membership. I just assumed they were wanting to collect interest on your money for those two months. Shorting you on months would be really tacky.
I have found out that my American Express card, which I got via Costco, automatically charges my renewal fee to the card on the date it expires. I'm not sure how to stop that, other than canceling the card. I don't recall signing anything extra to set it up that way, but it may have been one of the conditions (mentioned as a 'convenience' I'm sure) on the application I signed.
I also used to get my rebate check from Costco when I got my renewal statement. But since I never got a renewal statement (since it was automatically billed to Amex), I haven't gotten my rebate check. I was going to inquire at customer service when I was there last week, but the line was way too long (I had my kids with me). So I'm giving them another week, then I'll call them up to ask when I might get my rebate check.
The department of motor vehicles does the same thing with license plates. My renewal date is in May, but if I let it lapse and don't renew until August, my new plates are only valid until May and I pay the same price.
Back-dating would only make sense if you were somehow USING or benefiting from the expired membership during that period. Just like a magazine subscription, if you have a one year subscription (to a once a month periodical), they will send you 12 issues, then stop. If you wait two months then subscribe again, you get 12 more issues, but you miss those two months where you weren't a subscriber. You don't get the benefits during the period you didn't pay for. They didn't provide you anything, you didn't pay for anything. That's how it's supposed to be.
If you weren't in the store (or and didn't use any of their services) for the two months between the expiration and the renewal, your one year membership should extend 12 months from the date you paid for it. You paid for a year, you should get a year.
@humphrmi: Oh good because I purposefully let mine lapse because I knew it would be a few months before I'd be back and didn't want to waste it. If Sam's doesn't backdate then I'm good. Otherwise I better go double check the TOS with them and my dates.
@Jacquilynne: If I let my membership lapse for a couple months, then come back and renew, I've paid on time. "On time" is whenever the fuck I decide to re-up my membership. If I'm paying for a year's membership, it better be from the day that I re-sign up, not some protracted period that takes into account some time where I specifically didn't have a Costco membership, and thus did not shop there.
If they can retroactively bill me for a membership during the time between my account lapse and renewal, then I'll need to retroactively recoup the difference in cost between goods I purchased elsewhere instead of at Costco during those two months.
@dprboyne: Yes, the DMV does this because you are required by law to have your plates up to date and registered. The assumption is that you did benefit/use your plates during that interim because if you intend not to, you need to register the car as inactive with the DMV.
@chiieddy: I'm guessing their time machine was dated 2008. Yeah, 4 months backdating doesn't sound good.
I wonder if lots of people aren't getting a good deal from their memberships if they go several months without going to the warehouse. I guess if you occasionally buy big things that are deeply discounted you can make it work, you only have to save $50/year for the basic membership to be a decent deal.
I buy most of my coffee beans and EVOO there along with various other foodstuffs that are good quality and a good deal... wine, paper towels and toilet paper, etc. So, I find that I'm there every week or two, and what I save on coffee beans alone almost pays for an executive membership.
@humphrmi: sam's club did it to me last year when i renewed online, a month and half after it expired. next time i'll either renew on time or go in to the customer service desk
This is getting dangerously closer to BAD CONSUMER...
You're supposed to be paying for a yearly membership to this membership warehouse.
You don't get money back from the gym if you don't go for a few weeks, you don't get money back from your social club because you only participated in events 11 out of 12 months.
You're paying for a YEARLY membership. Fork over the extra $4 and quick trying to game the system, cheapskates!!
(or at least don't expect them to treat you like any sort of loyal member, which you are clearly not)
@GearheadGeek: I bet if you tracked it you might find you save a lot more than that.
I have both a Costco and BJs membership. Costco is mom's, she lives in Cali and they don't have BJs there. BJs is mine, they're open later so it's worth it to us. Just the money we save on milk alone (2 gallons a week, approximately $170 savings a year) pays for both memberships and thensome. That doesn't even count the other things we only buy there, like bread, meat, etc.
@jaya9581: Oh, I definitely save more than just that, my point was that because I shop there regularly for things I have found to be a good deal for me, I know that my coffee savings alone justify the membership and the rest is gravy. I actually paid for decades of Costco memberships by using their services when buying/selling houses in 2007... I didn't have a worthwhile referral for a realtor in either city, so I got kickbacks for using Costco-referred realtors and the Costco-referred mortgage broker was able to offer competitive rates and I got a fat kickback on that as well. I'm definitely hooked. :)
@FranktasticVoyage: How is it bad consumer? You've paid for the yearly membership. Now your membership is over, and you're deciding if you want to continue your relationship. At the point you decide you want to continue your relationship, they should bill you for membership - not some hypothetical date in the past while you were still thinking about it.
@Jevia: You gave them your Costco membership number when you signed up. The membership agreement states there is no annual fee for the card with continued Costco membership. If you cancel your Costco membership, the $50 annual fee will hit on your renewal date.
Funny, I asked for my membership to be backdated once and they wouldn't do it. They were pitching the executive membership at the register and informed me I would have gotten $250 had I purchased it 10 months earlier.
I told them I would buy the executive membership for two years if they would backdate one and pay me the $50 that would be left over from the rebate, but they wouldn't.
@Xerloq: I don't plan to cancel the Costco card, but may cancel the Amex card (since they keep cutting my credit limit every time I make a payment, pretty soon it'll be $100 credit limit and there won't be a use for the card anyway).
You're paying for a YEARLY membership.
@FranktasticVoyage: Exactly. A yearly membership, not a 9 or 10 month membership which is what you get when they backdate it.
This would be like going to a gym and paying month by month, not going for three months and them wanting to get paid for the three months you weren't there when you come back.
@dprboyne:
Same with drivers licenses in NJ. I forgot to renew my license for a couple of months, but my new one still expired 4 years after the previous expiration date. Meh.
@ZManGT:
Absolutely. Also, new members get coupons for free coffee, chicken, photo printing, bottled water, etc.
This happened to me several years ago and I came very close to cancelling my membership. I have other issues with Costco, tho. But the food savings usually outweigh them. My membership fee is up for renewal in September and is automatically added to my credit card. If I chose not to renew, I also lose the American Express card and take a hit to my credit rating. Not sure what to do about that right now but will know soon enough, should I decide the fee isn't worth the hour drive anymore.
Sam's Club pulled this on me when I did not renew for 3 months after mine had expired and I just let it slide. Then, 9 months later they said I was expired. Rather than fight them over it, I just quit going. I only went a couple of times a year anyway, so no great loss. It has now been 20 months, I wonder if they would charge me for the time I have let it elapse?
@ZManGT:
Plus, at least here in Canada, if you enter a special "Web code" when buying a new membership, they mail you a gift card. It used to be $25 now it's $10. Which is still pretty good, considering a basic membership is $55.
@GearheadGeek: Unless you're shopping for a family of 3+, I doubt anybody saves money shopping in club stores. There's only so many consumables a single person or couple can consume.
@Jevia: While you do not recall signing anything extra to set up [automatic renewal] that way, it was definitely one of the conditions on the application I signed. It wasn't mentioned as "convenience," like you sarcastically stated, but rather as a condition for the waived annual fee, if you had read the fine print as I had. If they had charged you an annual fee anyway, then I would complain to Costco and/or Amex about auto-renewals being charged to your Amex card.
The rebate check from Costco (or did you mean Amex?) comes every February with that month's statement, unless your card was cancelled by Amex due to recent economic downturns. People have posted on Consumerist complaining that their card was canceled in January before they were set to receive their rebate checks. They've complained to Amex, but to no avail. Others recommended bringing up the issue with Costco since they've partnered up with Amex and should hold some "responsibility," though that probably wouldn't do any good.
So is there a grace period for Costco associated with this backdating. As in, if you're membership expired, can you still use your card for the next two months in the store with the assumption that you'll be renewing?
If not, it's not a bad place to start....you show up with an expired card and a cart full of stuff. The cashier politely tells you that you're 1 month into the grace period, then commences to check you out.
@oneandone: Are you serious? It's not some hypothetical date. It's your RENEWAL date.
Would you feel better if they just sent you a renewal notice and charged you a late fee if you didn't pay in time?
@Rectilinear Propagation: So those 2-3 months when you were late in paying a renewal are supposed to just be "free"? Come on...
And go ahead and try that with your gym. Don't pay for a couple months and see if your membership is still valid. I think you'll be in for a rude surprise. You can cancel your member at the end of any given month, but you can't just pick and choose which months you want to pay for.
@ChuckECheese: I'm shopping for 2 fat guys who like wine and cook most of our meals at home. As I said, I have a net savings just on coffee beans compared to buying them at a good grocery store or at World Market.


















So when my membership expires I should just get a new one rather than renew?