Comment by dahinds
18 hours ago
The claim could be true even if every customer is exactly like you. The implication is that Costco doesn't really make money selling stuff, they just need to roughly break even. And "breaking even" here includes paying rewards on purchases. The fact that you earn a lot of rewards doesn't stop your membership dues from contributing to Costco's bottom line.
> The fact that you earn a lot of rewards doesn't stop your membership dues from contributing to Costco's bottom line.
It could also be similar insurance floats: premiums and claims generally even out, but they make their returns while they're holding people's money.
(Perhaps it's explained in their financial statements, but I've never been curious enough to check.)
Plus every manufacturer discount is technically advertising revenue for Costco (or any retailer).
Affiliations with providers of products like insurance, bottled water delivery, checks and the credit card are also sources of revenue.