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Costco is unlike other stores in that it costs money upfront to be able to shop there. But there’s a reason millions of people are willing to spend money on Costco access. What you lose by paying a membership fee, you gain in all the money you’ll save during the year.

You have two choices when joining Costco. You can spend $65 per year on a Gold Star membership, or you can upgrade to an Executive membership for $130 per year.

With the Executive membership, you get 2% cash back on your eligible Costco purchases. And if you like the sound of that, you can check out this list of credit cards offering great rewards at Costco, too.

But what if you sign up for the Executive membership, only to not earn enough cash back to recoup the $65 upgrade cost? You should know that you can downgrade your Costco membership at any time, so you’re not stuck with the more expensive membership. But there’s more to the story than that.

You might earn more cash back than expected

If you spend enough at Costco, you might easily recoup the $65 it costs to upgrade to an Executive membership.

Here’s the math: If you spend $3,250 at Costco in a year, at a rate of 2% back on your purchases, you get $65 back in your pocket. The moment you spend more than $3,250, you’re ahead financially with the Executive membership despite the higher cost.

For example, if you spend $3,500 at Costco during the year, the Executive membership will pay you $70. Once you subtract the $65 upgrade cost, you’re still ahead by $5. And while it’s not a life-changing amount, it’s still money. (Plus, at Costco, it’s enough to bring home a rotisserie chicken.)

Now, you might think that $3,250 is a lot of money to spend at Costco in a year. But if you shop there twice a month and spend $150 per visit, that’s $3,600 a year.

Or, let’s say you do one Costco stock-up per month and spend $250 each time. That’s $3,000 a year. But from there, all it might take is a one-time purchase at Costco to get you beyond the $3,250 mark. If you buy a $600 laptop at Costco, or a $300 vacuum, you’ve made back more than your Executive membership upgrade cost.

Why Costco’s Executive membership is a no-risk proposition

Costco’s Executive membership makes financial sense for a lot of people. But what if you upgrade to the Executive membership and don’t spend $3,250 in a year? In that case, there’s good news — you won’t be out any money.

When you realize your Executive membership isn’t working out and you ask Costco to go back to a Gold Star membership, a customer service representative can see how much cash back you racked up on that membership. And if it’s not at least $65, they’ll refund you the difference and only charge you $65 for a basic membership from then on.

So let’s say you get an Executive membership and, after a year, only spend $3,000 at Costco. That gives you $60 back. If you downgrade your membership, Costco will refund you the $5 you didn’t make back on your upgrade fee.

This means you’re taking no risk by upgrading your Costco membership. The worst-case scenario is that you’ve laid out a little extra money upfront. But you’re guaranteed to get your $65 upgrade cost back either way. If you’re not sure you’ll spend enough to make the Executive membership worthwhile, you might as well just give it a try.

Top credit card to use at Costco (and everywhere else!)

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Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.

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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.