You can use your SNAP benefits at Costco. But should you? – The motley fool

A person with a shopping cart looks at a refrigerated item in a grocery store.

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Don’t assume that Costco is the cheapest way to buy groceries.

Most important points

  • SNAP recipients can use their EBT cards to pay for SNAP-approved items at Costco warehouses.
  • However, EBT cards will not work online, in food courts, or Costco gas stations.
  • Before you pay the annual Costco membership fee, find out if it will actually save you money. You may find better deals at stores that don’t charge a fee.

Costco’s low prices, free samples, and affordable food court are just a few of the reasons the chain has attracted millions of fans around the world. If you receive Additional Benefits of the Nutrition Assistance Program (SNAP)., you might be happy to know that you can spend them in Costco warehouses. Here’s how it works and why it may not be cost effective for every family.

Using your EBT card at Costco

SNAP benefits are loaded onto an EBT (Electronic Benefits Transfer) card, which can then be used as a debit card at many stores, including Costco. However, your EBT card only works in Costco warehouses. You cannot spend your SNAP benefits online at or in the food court or Costco gas stations.

Another limitation? Your EBT will not pay for non-SNAP approved items, whether at Costco or elsewhere. SNAP benefits are designed to pay for basic necessities such as dairy products, meat and fish, fruits and vegetables, and non-alcoholic beverages. You cannot use them to pay for things like alcohol, pet food, tobacco, or other non-SNAP products for sale in the grocery mecca.

That said, if you’re buying a mix of items, you don’t need to separate them before you checkout. A commenter reports that you can first use your EBT card to cover SNAP items and then pay off the remaining non-SNAP balance.

You can also use cash back apps with your EBT card at Costco. Multiple money back apps pays rewards on Costco expenses if you scan receipts after you’ve been in the store. It doesn’t matter if those expenses come from your SNAP benefits or some other route, making it a great way to put a few extra dollars in your bank account.

Should You Use Your SNAP Benefits at Costco?

The biggest consideration when it comes to spending your SNAP benefits at Costco is the $60 annual dues. If you’re considering paying that fee, you’ll need to save at least $5 a month for your membership to pay for itself, so think about how much you’d save.

You can even consider paying $120 a year for the executive membership, which will earn you 2% back on your purchases. Please note that the maximum monthly SNAP allowance for a family of four is $939. A family would have to spend $500 a month at Costco — more than half of those benefits — to cover the $120 membership fee. Any additional savings would be a bonus. Still, $120 is a lot to pay out at once and $500 is a lot to spend in one store each month. In addition, many families do not receive the maximum SNAP benefit and there are limitations on how long you can receive benefits.

That said, it is possible to shop at Costco without being a member. For example, you can ask someone who is a member to take you. They have to show their membership card upon entry and you use your EBT card to pay. However, other methods of avoiding the annual fee, such as using or spending with gift cards, will not work if you pay with an EBT card.

Here are some other factors to consider.

1. Emergency benefits don’t last forever

If you live in a state that still pays SNAP emergency allocations, that extra money won’t last forever. States can only pay the additional food payments as long as the national health emergency is in effect. At the moment, the government has not said it will extend the state of emergency, but it will not end it either.

It has not officially extended the state of emergency beyond the current expiration date of mid-January. However, it’s also promised 60 days’ notice before it ends, so we’re sort of in a health emergency. At the time of writing, we can assume that states will be able to afford that emergency money at least until early February. Don’t pay the annual Costco fee thinking you’ll get extra SNAP money all through the next year.

2. Costco isn’t always the cheapest option

Costco can be a great value, but it doesn’t always come out on top when it comes to price. You may be able to get better deals at cheap supermarkets who do not charge a fee. Plus, if your state runs a dual food money program, you can get two-for-one on all your fruit and vegetable spending at participating stores and farmers’ markets. This can end up being considerably cheaper in the end.

3. Bulk buying is not for everyone

Buying in bulk can be a great way to save money, especially if you buy non-perishables that will last. However, it does not fit every household. For example, some families can’t afford to buy six pounds of ground beef all at once, even if it works out cheaper overall. Teaming up with a neighbor or family member can make those bulk savings more feasible, and can also allow you to split the annual dues.

It boils down

Every family is different and only you can determine if your SNAP benefits extend when you use them at Costco. Don’t automatically assume that Costco is the cheapest option, especially if you have to pay for the annual membership. After all, $60 can get you a lot of groceries, so it’s worth doing a little homework before paying that annual fee.

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