Costco shoppers use gift cards to avoid membership fees

Intrepid shoppers have found a loophole to skirt Costco's membership fees - by paying with a gift card, which doesn't sit well with some members.

The internet rife with sites explaining how to avoid Costco fees, something one member called 'annoying'

Gift card holders can apparently shop without paying the annual membership fee 2:19

Intrepid shoppers have found a loophole to skirt Costco's membership fees.

Costco, a membership-based wholesale retailer, offers discounts for consumers willing to pay an annual fee, which ranges from $55 to $110.

But customers can avoid those fees by paying with a gift card. Only members can purchase the cards, but anyone can use them.

A quick online search turns up blogs and websites that encourage customers to avoid membership fees by using gift cards instead.

Patrons who pay for a membership, like Scott Cowie, say this seems unfair.

Some Costco shoppers are paying for their purchases with gift cards to avoid annual membership fees. (Rick Bowmer/Associated Press)

"It sounds a bit annoying that I have to pay a membership to Costco and people can just give gift cards and give them to anyone they want without an extra fee being applied," said Cowie.

Cowie thinks the loophole could be abused. He thinks members could charge a small fee in exchange for purchasing the cards for non-members.

A Costco representative told the CBC that people rarely take advantage of the gift card system. If it is, the representative said, the company addresses it.

Consumer advocate Anna Wallner suspects the loophole might not last for much longer.

"I think people will always be looking for the advantage, but eventually if people are taking advantage of the system then I'm sure at some point Costco or whoever the retailer is will change the system," says Wallner.

Wallner says consumers who try to save a few dollars by getting friends or family to buy them Costco gift cards may want to reconsider.

"If you're spending a whole lot of time getting other people to buy gift cards for you, then you need to consider what your time is worth," says Wallner.

With files from the CBC's Bal Brach


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