I always found that weird because we get like 5x our membership dues back in rewards every year, so I guess we're the exception, rather than the rule?
It could also be similar insurance floats: premiums and claims generally even out, but they make their returns while they're holding people's money.
(Perhaps it's explained in their financial statements, but I've never been curious enough to check.)
Affiliations with providers of products like insurance, bottled water delivery, checks and the credit card are also sources of revenue.
But also remember regular members don't get cash back. The ratio is about 50/50. So about 40 million people pay for membership and don't get cash back.
That's not quite their policy - their explicit policy is "The Reward is not guaranteed to be equal to or greater than the Executive upgrade fee paid." - but they will refund you if you ask for it.
To justify the subscription I made the commitment to buy all my necessities there that I could, and in return I get back the equivalent of a month’s worth of free groceries.
The prices never really worked out in our favor and the experience of finding a cool product we did truly love only to find it not stocked the following month is awful.
It really makes me wonder how astroturfed the brand is.