Costco and AmEx breakup

[Brat]

Hey, so long as they give you a gift at the AMEX signup table go for it.

 

[Rickt]

There is no COSTCO store where I live but I am a member of Sams Club. As a Sams Club Plus members we had a Discover card with 2% cash back on all purchases but Sams Club moved from Discover Card to Mastercard in 2014. Mastercard is the most aggressive amongst the four major credit cards, I understand.

 

[Cobra9777]

Cobra, Is that your blog? Cute.
I guess we don't have the cult following that you have in Texas and our stores aren't mobbed. No problem finding a parking space (then again I park as far out as I can), no line to get in to store, hardly a line to check out or get out of store. I have had to stand in line to buy a frozen yogurt or hot dog...

No, not my blog. Just a very funny, well-written Costco rant that someone sent me a while back after I went on a similar rant.

 

[Spanky]

All co-branded cards from American Express and Costco can be used any place American Express cards are accepted through March 31, 2016.

That's a bummer. We use the AMEX card for other purchases also.

 

[6miths]

We went to Capital One Platinum MC in Canada but Costco now takes any MC. The Costco AMEX went extinct and AMEX reissued regular cards. I cancelled and chopped mine up as only used it at Costco. I had been considering a premium AMEX for travel due to all the airport lounge access but they have cut this way back so decided against that. Capital One MC is 3% restaurant, 2% gas and 1% for other things. It started with 3 months of 2% for regular purchases.

 

[splitwdw]

We went to Capital One Platinum MC in Canada but Costco now takes any MC. The Costco AMEX went extinct and AMEX reissued regular cards. I cancelled and chopped mine up as only used it at Costco. I had been considering a premium AMEX for travel due to all the airport lounge access but they have cut this way back so decided against that. Capital One MC is 3% restaurant, 2% gas and 1% for other things. It started with 3 months of 2% for regular purchases.

Crud! I have Visa. Not sure I want to go through canceling and getting a different card. Guess I'll wait and see what happens.

 

[donheff]

This could be a PITA. They accept any Amex card now. If they only start accepting co-branded MC or debit cards I will not be able to shop there without carrying cash. They better give fair warning or I will be walking away from the counter with $500 worth of goods rung up.

 

[athena53]

At the moment it appears Warren Buffet may lose ~800M on the AXP drop.

Should we take up a collection?

Oh, dear- DH and I have about $100K in Berkshire. Buffet doesn't need the money but I'll send you the link to DH's and my GoFundMe site as soon as I create it.

Costco has a cult-like following, so I doubt they will lose much revenue. Personally, I dislike Costco for many reasons and haven't been there in years. This fallout with AMEX just adds to the list of reasons to avoid them.

Yes, that blog captures a lot of my pet peeves with ANY big, warehouse-type store. I just went into Bed, Bath & Beyond and Buy, Buy, Baby, each for one single item, and you're practically forced to navigate through the entire store. Both had floor-to-ceiling walls down the middle and all the boring, essential items near the back. They pay psychologists big money to tell them how to maximize the average customer purchase.


Being retired, I can visit Costco in off-hours and without kids. I'm adamant about bypassing the samples, not making impulse purchases and not buying mass quantities of things that will go to waste because it's just DH and me. We joined so he could get their hearing aids (highly recommended) but I buy things like vitamins and supplements that I know we'll use, a case of disposable diapers when we visit the granddaughter, and large boxes of food and other items to donate to the local women's shelter. (We work from their Wish List so we know it's needed.)


But, to get back to the OT- DH and I always have at least 2 credit cards active. Our Marriott Visa gives back 1.5% so if that's what Costco ends up taking we'll just lose a little on the rebate. If they go with MasterCard, well, we'll find one with a good signup bonus!

 

[timo2]

This also would seem to be an issue for COSTCO, because why should a potential new customer sign up for a card that soon won't be accepted? They need to get the replacement rolled out promptly. I'm sure they have something already in the works.

We like the Kirkland brand items at COSTCO. good quality and good value. We will see what happens. But cash always works fine too.

 

[Midpack]

This could be a PITA. They accept any Amex card now. If they only start accepting co-branded MC or debit cards I will not be able to shop there without carrying cash. They better give fair warning or I will be walking away from the counter with $500 worth of goods rung up.

I have to assume there will be some credit card option, Canada got a replacement. I would probably drop Costco if the only option were cash or debit cards.

I am wondering about AmEx rewards for Jan thru Mar? Might be lost?

 

[travelover]

I have to assume there will be some credit card option, Canada got a replacement. I would probably drop Costco if the only option were cash or debit cards............

I really doubt that Costco would stop accepting credit cards. Consumers spend significantly more when they can charge it.

 

[poorcarver]

I charge everything and pay at the end of the month. If you don't do credit cards or PayPal, then you don't need my business.

 

[adrift]

Costco cards accounted for 8% of American Express’ billed business and 10% of its cards, according to a note by John Hecht, an analyst at investment banking firm Jefferies.

Wow. This is appears to be a big deal for Amex.

 

[timo2]

According to a story on Marketplace, "The average Costco customer has an income of $100,000 a year." I would like to see the source data, to see if they used the word average correctly (in lieu of 'typical' for instance) or if the actual average that high because of extra big incomes added in? I wonder what the median would be?

Average Costco customer makes six figures | Marketplace.org

 

[Midpack]

According to a story on Marketplace, "The average Costco customer has an income of $100,000 a year."

They sure hide it well in the parking lot and in the store near me. I certainly see some well heeled folks, but most not. Most Costco shoppers at our nearby store look more like WalMart patrons than Saks...

But then The Millionaire Next Door explained how looks can be deceiving. I am sure many of us here don't "look the part" of our portfolios.

 

[unclemick]

I married a Costco/Amexer. Before that I was Walmart/Tractor Supply.

heh heh heh -

 

[Walt34]

But then The Millionaire Next Door explained how looks can be deceiving. I am sure many of us here don't "look the part" of our portfolios.

That's been mentioned in other threads, and there may have been a thread on the topic. I know I still have a jacket purchased during the Nixon administration although DW doesn't like me to wear it in public.

Why would I throw it out? It doesn't have any holes in it. Well, none that show anyway.

 

[audreyh1]

We went to Capital One Platinum MC in Canada but Costco now takes any MC. The Costco AMEX went extinct and AMEX reissued regular cards. I cancelled and chopped mine up as only used it at Costco. I had been considering a premium AMEX for travel due to all the airport lounge access but they have cut this way back so decided against that. Capital One MC is 3% restaurant, 2% gas and 1% for other things. It started with 3 months of 2% for regular purchases.

3% for restaurant - now we're talking!!!

 

[Bestwifeever]

According to a story on Marketplace, "The average Costco customer has an income of $100,000 a year." I would like to see the source data, to see if they used the word average correctly (in lieu of 'typical' for instance) or if the actual average that high because of extra big incomes added in? I wonder what the median would be?

Average Costco customer makes six figures | Marketplace.org

I wonder if there's a source, and maybe it's household vs individual, but I believe it. Someone's buying those $60 bottles of store brand single malt: http://www.early-retirement.org/forums/f27/costco-kirkland-scotch-74558.html

 

[MBAustin]

I know I still have a jacket purchased during the Nixon administration although DW doesn't like me to wear it in public.

Why would I throw it out? It doesn't have any holes in it. Well, none that show anyway.

DH still has and wears regularly a shirt I bought at a mega-garage-sale in early 1992 for a quarter. I remember because I was pregnant with DS and used the sale as an excuse to have DH get some quality time with DD (2 at the time). I keep suggesting he get rid of it but in reality it still looks reasonably presentable.

Back on topic, I am in the bummed category - I like being able to use AMEX at Costco, but if they go the MasterCard route, I'll go back to using my debit card.

 

[splitwdw]

I was just at Costco and the American Express booth/table is set up back by the freezer section. A man was there signing people up.

 

[6miths]

That's been mentioned in other threads, and there may have been a thread on the topic. I know I still have a jacket purchased during the Nixon administration although DW doesn't like me to wear it in public.

Why would I throw it out? It doesn't have any holes in it. Well, none that show anyway.

And so what if it did have a hole! Lol. As I sit in my ski pullover shell (vintage 1990) that has a hole at the bottom front! It was well earned during an encounter with a tree. My other ski jacket (more like 1999) has a scrape/hole in the shoulder from a rub with an 'out of bounds' fence (the kind where there is a large drop on the other side). I wear them with pride. And I know that some might say that having two ski shells is the peak of extravagance but I don't like going out with them damp so I alternate them.

I believe the average income data. In my neck of the woods, Costcos are not very accessible and I would guess that almost everyone who shops there has a car and I would think that if you can afford to buy a year's worth of Kirkland paper towels when they are on sale that you are doing pretty well.

 

[TrvlBug]

We went to Capital One Platinum MC in Canada but Costco now takes any MC. The Costco AMEX went extinct and AMEX reissued regular cards. I cancelled and chopped mine up as only used it at Costco. I had been considering a premium AMEX for travel due to all the airport lounge access but they have cut this way back so decided against that. Capital One MC is 3% restaurant, 2% gas and 1% for other things. It started with 3 months of 2% for regular purchases.

Good to know they'll issue regular cards as I have a recurring monthly auto payment on that card and use it multiple times a year for their 'enhanced' insurance program when renting cars. In the US, it becomes primary, and overseas, it provides much better coverage that the usual cc car rental coverage bennies. for $17.xx per rental, it can't be beat.

 

[Cobra9777]

Costco cards accounted for 8% of American Express’ billed business and 10% of its cards, according to a note by John Hecht, an analyst at investment banking firm Jefferies.

Wow. This is appears to be a big deal for Amex.

Big revenue no doubt. But probably low margin, or at least it averaged down the total. Strategic alliances with mega-customers can be good for top-line growth initially. But over time, they inevitably leverage that volume (and in this case exclusivity) into lower pricing. And with Costco demanding even more, AMEX said enough is enough. Probably a very smart move in the long-run, and probably took Costco by surprise. AMEX will certainly be penalized during the transitional period by analysts who just see the revenue hit. But obviously, they would not have walked away from such a huge piece of business unless it was going to be a significant long-term drag on earnings to stay with it.

We were unable to reach terms that would have made economic sense for our company and shareholders, American Express CEO Kenneth Chenault said in a statement.

 

[Brat]

Let's see what kind of deal Costco seals with the card they choose.

One feature that I do like on my Costco Amex is my picture on the back. Merchants really like that as it assures that I am the card holder.