Costco Shoppers Find Loophole To Avoid Membership Fees

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402065 08: A shopper displays her Costco Wholesale membership card as she enters a Costco Wholesale store March 8, 2002 in Niles, IL. Warehouse retailer Costco Wholesale Corp. has reported higher quarterly profits as the promise of bulk goods at bargain prices resonated with consumers in the U.S. recession. Warehouse retailers charge customers an annual membership fee, typically $35 to $45, to shop at clubs that offer deep discounts on bulk quantities of items like food and household cleaners. ( | Tim Boyle via Getty Images

A handful of intrepid shoppers have found a loophole to skirt Costco's membership fees.

Costco, a membership-based wholesale retailer, offers discounts for those 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 do pay for the cost of a membership, like Costco member Scott Cowie, say this seems unfair.

"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 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.

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