The Controversial News That Costco Members Just Got
Costco members are part of an exclusive club with many perks and benefits. Some members shop to simply enjoy the free samples that the club warehouses famously give out. One membership perk is the gas, but the prices of the gas seem to differ from other gas stations.
The difference in gas prices at Costco may not be the savings that Costco members are used to receiving. Most members join the club for the deep discounts they offer. The company is widely known for its affordability of a wide range of products.
Costco members even enjoy perks on deals for home repairs, travel, and more. The membership fee gives shoppers access to items that have hardly any markup at all. Essentially, it is expected that customers will receive the very best price.
For the most part, Costco members rely on the store to do everything in its power to ensure that the prices are the lowest possible. While Costco is more than willing to provide customers with low prices for items they sell in the store, it is a different story at the pump. The way the company sells gasoline is much different than how they sell things inside the store and even different compared to other gas providers.
Costco members have come to know that sometimes, gas will be cheaper when purchased from the warehouse retailer. When the gas is more affordable, members flock to the pumps to enjoy that benefit and ensure their tank is full. But members have begun to notice one significant discrepancy.
Currently, gasoline prices are falling, almost collectively. Costco gas prices remain. The difference in how Costco operates its gasoline business comes into play here, and Costco members do not like it one bit.
As most other gas stations are lowering their gas prices, Costco does not decrease their gas prices at the same pace. They reduce the price at a slower pace in comparison to others. Creating a reverse effect, when prices are rising, the company raises their price for Costco members at a slower pace.
This method allows Costco to make up for some of its losses. Costco customers would obviously love when their gas prices were better than the others. That is the entire reason people sign up for a membership, which is to receive better prices.
This practice leaves Costco members feeling divided, and understandably so. The CFO, Richard Galanti, has stated that this practice is necessary for the company as a whole. As they offer low prices in most other areas, the company has to have a way to profit.
Gas has been a significant area of profit for Costco. The gas price practice, which Costco members have questioned, is said to make the company a top competitor while still providing the company with the opportunity to make money. The profit the company makes with this practice doesn’t come directly from the gas itself but from what they do with the money earned.
Costco may do away with this practice at some point. When, exactly, is unclear. For now, Costco members can enjoy cheaper gas, some of the time.