Here’s How Costco Keeps Their Gas So Cheap

The answer is really simple.

The list of reasons why Costco is one of the best places to shop just keeps getting longer. But the one thing that tops the list for the majority of their customers is the low Costco gas price. In fact, Costco’s gas prices are the lowest out there. So, it makes sense that customers will wait in line for hours just to fill up their tank. But how can the warehouse chain really keep their prices that low? Once you learn the explanation behind the Costco gas price, read up on these Costco tips frequent shoppers keep to themselves.

The answer is simple: they just have very loyal customers. To purchase their gas, you have to be a member, and membership sales make up about 75 percent of the chain’s profit. Since new customers are enticed to sign up because of Costco’s cheap gas prices—and other great deals on everything from electronics to food—the chain can afford to price their merchandise and services much lower than competitors.

Having the gas stations right next to the store drives customers inside, too—meaning that every time a member comes to get gas, they’re also likely to drop a few dollars on food or other household goods as well, including these Kirkland items you should always buy at Costco.

So, it really does pay off to be a loyal customer at Costco, even if that means spending most of your morning waiting in line at the pump—it’s worth it for the cheap Costco gas price. There’s no secret to making the lines shorter, but here are secrets Costco employees don’t want to tell you.

Morgan Cutolo
Morgan is the Assistant Digital Managing Editor at Reader’s Digest. She graduated from the University of New Hampshire in 2016 where she received her Bachelor of Arts in Journalism. When she’s not writing for rd.com or keeping the 650+ pieces of content our team produces every month organized, she likes watching HGTV, going on Target runs, and searching through Instagram to find new corgi accounts to follow.