Does Costco count as grocery spending for credit card rewards? Merchant codes explained

Does Costco count as grocery spending on a credit card? Usually not. Costco warehouses are typically coded as wholesale clubs (merchant category code 5300), not grocery stores (5411), and most Canadian grocery bonuses are tied to 5411. So a card that pays 3% on groceries can pay its base rate at Costco instead: 0.5% on the BMO CashBack Mastercard, for example. Check how your card treats Costco before you pick one for your Costco runs, and compare the options on our best cards for Costco page.

How do credit cards decide what counts as groceries?

Not by what you buy. Every merchant is assigned a merchant category code (MCC) by its payment processor, and your card's bonus categories are matched against that code. Tangerine spells it out: purchases earn its 2% rate "when the merchant's MCC matches up to your selected 2% Categories", and it notes that "we don't determine how merchants are categorized". A cart full of milk, eggs and produce doesn't change the code.

What merchant code is Costco in Canada?

Costco warehouses are typically coded 5300, wholesale clubs. Payment industry MCC references describe 5300 as wholesale club stores "offering bulk merchandise and groceries to members at discounted prices" and list Costco as a common example. Costco sells groceries, but it also sells tires, TVs and furniture, which is why the networks don't treat it as a supermarket. Codes are set per location, so a single warehouse can differ; your statement is the final word.

Which grocery cards pay their bonus at Costco?

Read each card's terms for how it defines a grocery store. Two common no-fee examples, checked October 4, 2026:

Some issuers in Canada list exceptions for specific stores, and terms change, so check the current fine print. If a card's terms don't name Costco or wholesale clubs, assume the bonus won't apply until your statement shows otherwise.

How much does the grocery code cost you at Costco?

Example only: a household spending $400 a month at Costco warehouses.

The gap between what you might expect ($144) and what you'd likely get ($24) is $120 a year. For warehouse spending alone, a flat 1% card beats a grocery card that drops to 0.5% at Costco. Keep the grocery card for the supermarket and use a different card for Costco.

Does Costco gas count as gas for credit card rewards?

Usually, yes. Costco gas bars are typically coded as service stations (5541 or 5542), separately from the warehouse, so cards with a gas category tend to pay their gas rate there. Tangerine's Gas category uses those two codes. The CIBC Costco Mastercard pays 3% at Costco gas, more than its 2% at other stations. See the Costco gas guide for how paying works at the pump.

Which card should you use at Costco instead?

First, it has to be a Mastercard (or debit or cash): Costco warehouses in Canada don't take Visa or Amex (see which cards Costco accepts). Among Mastercards, look for one with a strong flat rate rather than a grocery bonus, or the CIBC Costco Mastercard: $0 a year, 1% in warehouses, 3% at Costco gas and restaurants, 2% at Costco.ca and other gas stations. Its cash back comes once a year as a Costco certificate; our review runs the numbers.

How can you check how your card codes Costco?

Buy something small at your warehouse, then look at the transaction in your card's app or online banking. Many issuers show the category or the cash back earned on each line. If it shows the base rate, Costco isn't counting as grocery on that card. You can also call your issuer and ask how it categorizes your local Costco.