Gypsum offers rebate program to enhance Costco patronage
GYPSUM — It’s common knowledge that Costco generates substantial sales tax revenue for the town of Gypsum.
So it stands to reason that the town wants to do whatever it can to encourage people to shop at the warehouse retailer. In that vein, Gypsum has allocated $15,000 in its 2017 budget toward the goal.
Through its Costco Executive Membership Rebate program, the town of Gypsum will provide money for the retailer to refund 50 percent of the annual membership fee for new or upgrading Executive members. For the customer, it means a $55 rebate. For the town and the business, it hopefully means a loyal and frequent customer.
“We want to encourage membership attachment to that store,” said Jeremy Rietmann, Gypsum Economic Development Director.
“It is a fantastic benefit for our new Executive members,” said Richard Carlson, manager at the Gypsum Costco. He noted that while the town has pledged money for the effort, Costco is still working to finalize details before launching the program.
Since opening 10 years ago, Costco has achieved a high membership saturation rate in the local community. While the Gypsum Costco has always been a regional draw, the company still wants expand its new member base beyond the Eagle Valley.
The rebate program is open to residents of Eagle, Grand, Lake, Moffat, Garfield, Jackson, Mesa, Pitkin, Rio Blanco, Routt and Summit counties. As an example of how the program would work when up and running, Costco representatives could tout the rebate at member recruiting booths at community events.
To qualify for the rebate, a prospective Executive member must not have held an Executive membership at the store for at least six months.
According to Rietmann, the rebate is also promoted to get regular Gold Star or Business members to upgrade to Executive member status.
Gold Star memberships and Business memberships each cost $55 per year. A Gold Star member card allows a customer access to any Costco store. The Business membership has the added benefit of allowing purchases for resale options.
An Executive membership costs $110 per year and gives members a 2 percent reward on qualified purchases. Executive member also have access to additional benefits and greater discounts on Costco services and select travel products.
Rietmann noted that getting a customer to commit to an Executive membership is a big step. Once they are executive members, Costco’s research shows customers are very likely to retain their membership from year to year. In essence, an Executive member is more likely to be a forever member. That’s what the company wants and it is also what Gypsum wants.
In the long run, Rietmann added an Executive member is more likely to spend more at Costco, which means he or she is also paying more sales tax to the town of Gypsum. At the $1,600 annual spending level, the town breaks even on its $55 contribution.
“After a customer reaches that level, then it is a significant net benefit to the town,” said Rietmann.
Beyond Sales Tax
Beyond the sales tax receipts, Rietmann noted that Gypsum also wants to partner with Costco because the company is a large local employer and a good corporate citizen in Gypsum. Taken as a whole, he noted the town of Gypsum is definitely invested in Costco’s success.
“As far as Gypsum is concerned, that store provides substantial revenues for the services we provide in town,” Rietmann said.