I’m a Costco member and have been for nearly 20 years. I’ve been thinking about these data breaches and it makes me really wish that Costco would change its policy regarding paying at the register. Currently they will only accept cash, THEIR OWN American Express cards, or debit. The problem I’m having is the debit issue. After Target got hit last year I stopped using my debit card 100% - far too risky to put my cash on the line. I still carry a zero balance on my Visa card, paying in full every month - but it is shocking to see the amount due these days - I liked (basically) paying in cash with my debit card - anyway…When I go to Costco, it’s for dog food and paper goods, sometimes vitamins, and the bill is in the $50-$60 range. I suppose I could go to the bank first, which is not the end of the world, but does add another step to the process, and they are a few miles apart (and no room for any impulse purchase). I wonder if there’s some way I and others can start pressuring Costco to rethink their payment methods. I feel like a little fish in a big pond on this one, but I certainly can’t be alone in thinking about it.
“…THEIR OWN American Express cards…”
Unless there has been a policy change, Costco accepts ALL Amex cards, not just the TrueEarnings Amex. Our Neiman used to do the same thing - only recently they started to accept Visa and MC at their store in my neck of the woods. In Costco’s case, they most likely negotiated a deal with Amex where Amex offers the cashback and lower transaction fees to Costco in exchange for exclusivity. But that is just my guess.
I do not see any compelling reason to pressure them to accept Visa etc. I like my Amex cashback and low Costco prices.
BTW, most Costcos in my neck of the woods have a cash machine…
Yes, I use an Amex-brand Amex card at Costco, and have for years. Nary a problem. (And, truthfully, the Amex-run cards seem to have way better customer service and security than do Visa/Mastercard/Amex-cards-not-run-by-Amex*
*I only found out a couple of years ago that there are a number of banks that now issue Amex cards, but it is the bank’s own customer service that handles any issues, and the bank’s own security system. This is the way the one you can get through Fidelity works, and it has terrible, awful reviews. My cards have always been issued directly by Amex, and I could not be happier with them.
Costco takes any Amex and of course cash, debit, checks if you must. I can promise you that they reevaluate their payment methods constantly and are as focused on data security as everyone else. One thing that helps a lot is that they do not sell any of their data for any reason - ever. Honestly as far as who their card is it’s who gives the best service for the best price. Legacy Members will recall the Discover to Amex switch, just recently is the change at Costco Canada to Capital One from Amex. Besides, got to love that cash back 
https://www304.americanexpress.com/credit-card/compare lists a number of American Express cards with no annual fee and grace period. The Costco one is such a card (if you have Costco membership), but there are others to choose from.
So the simple solution is to just get such a card to use at Costco.
Agree that Visa/MC debit cards have a higher risk and amount of trouble with respect to fraud than Visa/MC credit cards. Unfortunately, Visa/MC debit cards seem to be the default on new bank accounts these days; you have to specifically ask for a card that can only do ATM or PIN debit.
Love my Costco Amex card: 3 % back on travel or gas, or something like that… Get a big fat check every year that covers the Costco membership fee and provides 2-3 hundred dollars in free things!!!
I didn’t like the AmEx rule either, but I was bribed by the $0.20/gallon gas savings. The rewards for the first year paid our membership fee so I got over it :-).
@anxiousmom – sorry, a little off topic…but have you considered an Executive membership? Higher annual fee ($110 vs $55) but they rebate an additional 2% on all Costco purchases. (I think postage stamps are excluded.) So, in addition to the money you receive on all purchases charged to Costco AmEx, an additional 2% is reimbursed on all Costco purchases.
I think you would need to spend $5500/year in Costco for the Exec membership to pay off, but we are way past that level of spending.
@ucbalumnus – you are absolutely correct about having to request a non-debit card on bank accounts. My son is perhaps one of the few college freshmen w/o a debit card. I just don’t trust them.
Yup. I have the executive membership. I also get that.
I’ll have to re-look at the “any” AMEX card rule at Costco, I could have sworn it was only their (Costco) issued AMEX.
I’m quite sure Costco is fine with any AmEx. Believe S used his gold Amex there.
I love getting my big rebates from both Amex and Costco executive membership. I did read not too long ago, though, that Costco is considering ending their relationship with Amex and switching over to MasterCard (apparently they already did in Canada):
http://www.bloomberg.com/news/articles/2014-11-06/costco-said-to-weigh-dropping-amex-as-u-s-card-partner
This was a couple of months ago; I don’t know where things stand right now.
Interesting, as Sam’s Club is also with MC. Costco was once with Discover. Lots of us switched to AmEx just because of Costco. The folks that do extended warranty on the Costco AmEx cards are great and easier to work with than other extended warranties on CCards, in my experience.
Himom - you are right about the extended warranty. I had forgotten about that perk. We had a flat screen TV bought at Costco that died right after the manufacturer/Costco warranties expired. Amex refunded the entire cost of the purchase in full. By that time flat screens were cheaper and better than the one we had bought two years prior so we got a better TV for less money. Great experience.
I’m not as worried about Costco as other retailers. There are two major issues with retailer credit security: infection at the POS terminal and break-in at the corporate level. Costco’s POS terminals are old and maybe there’s some risk at the self-check stations but most are right at the cashiers’ hands so there would be limited ability to insert a skimmer. Don’t know about their corporate security: remember, Target was breached through a vendor who had access. I wouldn’t be surprised if Costco’s system had less access because their pricing policies are so odd and they don’t carry wide selections from vendors.
Skimmers are more of a concern with unattended card readers like fuel pumps and ATMs.
I don’t see why Costco would necessarily be less vulnerable to being cracked than other retailers, other than perhaps doing security audits in response to others being cracked. The number of products carried seems like it has nothing to do with it. The “vendor” in the Target case was more of a contractor, not a company whose products are sold at Target.
http://krebsonsecurity.com/2014/02/email-attack-on-vendor-set-up-breach-at-target/
This was announced today… they are ending their partnership with Amex. But the article I read didn’t say if they were going to go with another credit card company.
I know so many people who are giddy with happiness because of the perks of having an Amex with Costco (we never had one). Will be interesting to see what direction Costco ends up going.
Here are some details:
http://finance.yahoo.com/news/costco-stop-accepting-amex-cards-133314755.html
Says that as of 4/1/2016, they’re going to have a CapitolOne MasterCard. Details coming. AmEx cards are fine until the changeover.
Apparently this is the deal for Canadian Costco members; likely we will see the same: http://www.capitalone.ca/credit-cards/costco/
Benefits sound pretty much like the Costco Amex card, with some differences in percent back. We’ll have to see once the deal is finalized.