In a bold move aimed at meeting the evolving financial habits of American consumers, Costco USA has introduced a Buy Now, Pay Later (BNPL) solution across select locations, partnering with payment platform Affirm to offer extended payment options for purchases over $500. This strategic development reflects a wider trend in US retail, where affordability, access to credit, and consumer empowerment are shaping the future of in-store and online shopping.
Costco Moves with the Times
Costco, long admired for its value-first model, is now recognising that its customers—many of whom are navigating economic uncertainty and cost-of-living pressures—want more than just low prices. They also want control. The BNPL feature offers just that. With financing plans stretching up to 36 months, Costco members can now walk out with big-ticket items while spreading the cost over manageable monthly payments.
Crucially, this isn’t just a delayed payment model—it’s a customer retention strategy. By adding flexibility without over-complicating the checkout process, Costco is creating deeper loyalty among its membership base, especially for those making large or essential purchases.
What Does It Mean for Retailers?
Retailers across the US—and indeed, globally—are watching closely. While BNPL services are not new, their integration into the warehouse model is relatively rare. Costco’s approach is particularly significant because of its partnership with Affirm, whose offering includes:
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Soft credit checks (no impact on credit scores during eligibility checks),
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Customisable repayment terms based on credit and cart size,
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Transparent interest rates, ranging from 10% to 36%, and
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No early repayment penalties.
A typical example cited: a purchase of $815 could cost between $840 and $903 depending on the chosen term and interest applied. While interest-bearing, the clarity of the cost breakdown is what sets this model apart from traditional credit.
The Bigger Picture – Retail Innovation in the USA
This move fits within a broader shift in American retail strategy. Flexible financing, once limited to furniture or electronics chains, is now entering everyday retail. Consumers are clearly receptive—especially younger shoppers and families balancing budgets month-to-month.
From an industry standpoint, the ability to convert large shopping trips into manageable plans could boost average basket sizes and open the door to higher-value categories such as home appliances, office equipment, or even seasonal bulk purchases.
What About the Risks?
There are concerns in the financial community around BNPL platforms encouraging overspending. However, Costco’s $500 minimum spend requirement, combined with its historically cautious financial model, may help mitigate misuse.
Moreover, Affirm’s practices—such as interest disclosures upfront and no hidden fees—stand in contrast to traditional credit cards, which often blur the line between affordability and debt traps.
A Future-Focused Retail Giant
Costco’s launch of BNPL underlines its ability to evolve. Whether by extending gas station hours, streamlining digital services, or enhancing payment options, the company is making strategic updates to remain relevant in a market that is changing fast.
As 2025 unfolds, International Supermarket News will continue monitoring the impact of flexible payments on retailer performance, consumer satisfaction, and broader trends in retail credit solutions. What is clear is that Costco’s decision positions it not just as a value leader, but as a value innovator in the North American landscape.
ISN Reveal: More retailers are expected to adopt BNPL solutions by Q4 2025. Will the UK and European chains follow suit with similar offerings? Stay with ISN for exclusive interviews and in-depth retail intelligence.