3 Perks of Buying Gift Cards at Costco

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One of the most overlooked hacks for saving money at Costco is buying gift cards. Costco has a huge variety of gift cards for everything from restaurants to movie theaters to sporting events.

But why buy them at Costco instead of, well, anywhere else? I have a few reasons.

1. Costco sells gift cards for up to 30% off

The main reason I call buying gift cards at Costco a savings hack is that you don't need to pay full price for them. Costco sells most gift cards for around 20% off the face value, but I've seen deals for up to 35% off.

You can purchase digital gift cards online at Costco.com. Digital gift cards are emailed to you after purchase. If you want physical gift cards, you can head to your local Costco store. Just keep in mind the selection will be more limited.

2. Executive members earn 2% back

The primary perk of being a Costco Executive member is you get 2% back on your Costco purchases (paid out as a lump-sum Reward once per year). Retailer gift cards qualify toward the 2% back.

Alright, so 2% doesn't sound that impressive against a potential 35% discount, but that's not the way to look at it. It's 2% on top of a 35% discount -- which is very cool. (All about perspective, friends.)

This works whether you buy gift cards online or at Costco.com, so you can still pick digital or physical gift cards depending on what you need.

3. This all stacks with credit card rewards

I'd argue points one and two are pretty compelling already, but I'd be remiss in my duties as a rewards evangelist if I didn't point out that the regular discounts and the 2% Executive Reward all stack with credit card rewards.

For example, Costco sells a four-pack of $25 TGI Friday's gift cards for $79.99. Let's say an Executive member makes the purchase with a cash back rewards card that earns 3% back at wholesale clubs.

• $100 in gift cards sold for $79.99 is a savings of $20.01
• 2% back for the Executive Rewards is $1.60
• 3% back in cash back rewards from the credit card is $2.40

That means, altogether, you'd have an effective cost of $75.99 for $100 in gift cards.

Bonus tip: Don't forget about Costco Shop cards

In addition to its selection of retailer gift cards, Costco also offers its own gift cards for Costco purchases called Costco Shop cards. Arguably, the most interesting feature of Shop cards is that they can be used by people who don't have a Costco membership.

In other words, if you have friends or family members who'd like to give Costco a try but who don't want to get a membership, you can gift them a Costco Shop card. They'll be allowed into the store to use their card, giving them the opportunity to check it out.

It's important to note that, unlike Costco's other gift cards, Shop cards aren't discounted and they don't count toward your 2% Executive Reward.

The next time you need some gift cards, don't forget to check out Costco. You could save money and earn rewards.

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