Costco Gold Flipper Bought Over $100K in Coins This Year

What sets Costco apart from typical gold retailers is that its asking prices are often very close to current market prices, meaning your purchases retain more value early on.

The real attraction, however, is the company’s offer, under which Executive category members receive a 2% bonus, and Costco credit card holders can count on another 2% bonus.

That could effectively be a 4% discount on the spot price when all is said and done. And some cards from other institutions offer even higher incentives.

One Costco employee told Business Insider that he uses these percentage differences to make up to $500 a week by buying coins and selling them to online retailers and local stores.

His side hustle came to light quite unexpectedly last July, when he was browsing the Costco app and came across an offer for gold bars.

“I thought about it and slept on it overnight, and when I woke up, it was gone,” he said. BI reviewed the person’s Costco app orders and credit card transactions but is not identifying the person due to privacy and security concerns.

Soon after, he began buying as much as Costco would allow, primarily purchasing coins from U.S. and Canadian mints rather than bars from refineries in Switzerland and South Africa.

“For me, gold is gold,” he said, “but Mint is always in greater demand.”

One day, while driving through Texas, he stopped at a Costco warehouse that happened to have American gold coins depicting buffaloes.

“I ended up buying four of them right away,” he said, showing a receipt for more than $9,000. “I would do this every day if my local Costco had buffalo, but they only ever carry Pamps, and the resale of those is very poor.”

According to credit card transactions analyzed by BI, this member purchased more than $110,000 worth of gold in the last six months alone.

“I still work full-time in IT—it’s a side job that I do about a half-hour to an hour a week,” he said. “I end up making $300 to $500.”

Achieving these profits requires the use of multiple memberships, which technically bypasses several company policies and can result in account invalidation. There is also a critical caveat that short-term trading is a highly risky activity that comes with the possibility of significant financial losses.

The current maximum value of the Executive award is $1,000, meaning that resale profits drop significantly after you hit $50,000 in purchases in a year, or about 20 ounces of gold at current prices. In addition, Costco only allows one Executive membership per household or business.

The person BI spoke with has already used up his maximum two Executive memberships this year, and the promotional period that allows him to receive a 6% bonus for using his non-Costco credit card is set to end next month.

While Costco likely wouldn’t support this member’s actions, it’s not going to take any firm action either. The precious metals unit limit per transaction was originally two, now five, and the rewards limit will increase to $1,250 when the membership fee increase goes into effect in September.

Still, the member says he’s not worried if everything stops. For him, it was a chance to experiment and earn some extra money for travel and entertainment.

When asked why he didn’t just use his money to buy Costco stock, which has performed much better than gold as an investment, his answer was simple: “I invest in stocks, but I like gold — that’s all I can say.”