A trip to a Costco warehouse recently had tongues in a twist after a member was embarrassed and left infuriated when his American Express (Amex) card was declined at a self-checkout, accompanied by a harsh automatic announcement. The embarrassment followed after other shoppers berated the member for the experience, an indication of continued uncertainty regarding Costco’s payment procedure.
Why Costco won’t accept American Express
Costco’s exclusion of American Express cards is not a new policy, but the majority of consumers are oblivious to this large policy. From 1999 through 2016, Costco had a single relationship with American Express, with Amex being the sole credit card it accepted within the warehouse. In 2016, though, the arrangement came to an end as Costco made the switch to an exclusive arrangement with Visa, signing up with Citigroup as the issuer of the Costco Anywhere Visa Card.
Since June 20, 2016, Costco stores in the United States have only accepted Visa credit cards as a credit. Other options they accept are:
- Cash
- Checks
- Debit/ATM cards
- Costco Shop Cards (prepaid gift cards)
- Mobile payment systems such as Apple Pay, Google Pay, and Samsung Pay
- EBT cards
American Express cards are simply not accepted at the checkout stand or self-checkout, a policy made reasonably available on Costco’s website as well as in-store signage.
The self-checkout incident: Automated rejection and customer embarrassment
The shoplifter tried to make a purchase at a self-scan lane using an American Express card, and to his surprise, a jarring recorded voice exclaimed, “Costco does not take American Express.” The loudness and brashness of the warning purportedly embarrassed the shopper, who felt singled out from other shoppers.
What added insult to injury was the way the other consumers reacted, criticizing the member for the issue with payment, as it was company policy. It is a far too common issue: most are not aware of Costco’s payment limitations and unfairly assume the consumer made the mistake through using an acceptable credit card.
Why does Costco only accept Visa
Costco’s unilateral deal with Visa is basically a business choice to minimize merchant fees and streamline payment processing. Visa presented Costco lower transaction fees than American Express, enabling Costco to maintain costs low and transfer the savings to members. Additionally, Visa’s immense acceptance and use around the globe make it an uncomplicated one for most people.
The transition also saw the introduction of the Costco Anywhere Visa Card from Citi, with rewards focused on Costco customers, including:
- 4% cash back for eligible gas purchases worldwide
- 3% cash back at restaurants and travel
- 2% cash back at Costco
- 1% cash back on other purchases
It replaced the Costco American Express card, which was discontinued after June 20, 2016.
How to avoid payment issues at Costco
To avoid the inconvenience or embarrassment of not being able to pay during checkout, Costco members and shoppers must:
- Make credit payments using a Visa credit card within the store.
- Apply for the Costco Anywhere Visa Card by Citi to redeem maximum rewards.
- Pay with debit cards, cash, checks, or mobile payment products that are accepted by Costco.
- Buy Costco Shop Cards ahead of time as prepaid funds.
- Verify payment options on Costco’s official website prior to shopping.
What to do if you only have an American Express Card
If you are an American Express card holder or simply have an Amex card, you can’t use it directly in Costco warehouses. Nonetheless, you can:
- Pay for Costco Shop Cards using your Amex card in-store or online and spend them at check-out.
- Shop online at Costco.com, where online transactions are accepted by MasterCard and American Express.
- Use mobile wallets tied to other accepted cards or bank accounts.
Certain third-party sellers, such as Kasheesh, purport to process Amex payments indirectly, but they are not authorized Costco payment methods and may incur additional fees or risk.
Knowing Costco’s payment policy spares one from shame
The humiliation of having a Costco consumer “embarrassed” by a self-checkout notice declining American Express is a reminder to customers to be sensitive to Costco’s payment policy. The boisterous automated announcement is store protocol to uphold its single Visa policy and has nothing to do with any person individually.
All other consumers should be aware that payment denials are store policy matters, not customer mistake, and respond with compassion and not condescension.
To provide an easy shopping experience, Costco members have to use Visa credit cards or other facilities and plan their budget well so that they are not caught off guard at the cashier’s counter. These policies help customers understand and spare them unnecessary embarrassment.
