Pearlstone v. Costco Wholesale Corporation, No. 4:18-cv-00630-SRC (E.D. Mo.)

If you cancelled your Costco executive membership and did not receive a full cash refund of your membership or upgrade fee, you may be entitled to a benefit from a class action settlement.

The U.S. The U.S. District Court for the Eastern District of Missouri authorized this notice to inform
Settlement class members about their rights. This is not an advertisement from a lawyer.

This notice provides important information about a proposed settlement in a class action lawsuit against Costco Wholesale Corporation (“Costco”). The lawsuit involves claims that Costco violated the law by failing to refund membership and upgrade fees to Costco executive members who cancelled their executive membership. Although the court presiding over the case has not decided who is right or wrong, the parties have reached a compromise to end the lawsuit and provide compensation to those who may have been affected. Please read this notice carefully. It summarizes the rights and options under the settlement. You can access and read the full settlement agreement here.

In a punitive class action lawsuit entitled Pearlstone v. Costco Wholesale Corporation, No. 4:18-cv-00630-SRC (E.D. Mo.), Plaintiff’s Complaint alleges, among other things, that Costco enters into contracts with its customers which permit customers who enroll in a Costco executive membership to cancel their membership at any time and receive a full refund of their membership and upgrade fees. Plaintiff asserts that Costco breached the contracts by failing to provide certain cancelling executive members with a full cash refund and instead Costco partially refunded the membership fee by subtracting the amount of any outstanding rewards certificate from the refund.

Costco denies that they did anything wrong, and the court has not decided who is right or wrong. Rather, the parties have reached a compromise to end the lawsuit and avoid the uncertainties and costs associated with further litigation. If the court presiding over the lawsuit approves the settlement, the members of the settlement class will be eligible to receive benefits from the settlement, including the ability to receive individual cash payments.

The settlement class members’ rights and options under the settlement—and the deadlines to exercise them—are explained below.



You can submit a claim to receive a benefit from the settlement fund. Under the settlement, all settlement class members who timely submit a valid claim are eligible to receive one of two options: (A) a free, non-refundable one-year gift of a Costco membership or a one-year extension to your existing membership; or (B) a payment of up to $15. Please see FAQ 4. Click here to file a claim.


You can exclude yourself from the settlement. If you pursue this option, you will not receive a cash payment or any other benefits from the settllement, but you will retain the right to bring your own lawsuit against Costco. Your request to exclude yourself must be submitted by mail and postmarked no later than November 24, 2020. You must follow the process described in FAQ 8. If the settlement is approved and you do not exclude yourself, you will be bound by the settlement and will release certain claims as described in FAQ 4.


You can object to the settlement. The deadline for objecting to the settlement must be postmarked by November 24, 2020. All objections must be mailed to the parties' lawyers and the Settlement Administrator. See FAQ 7.


Ask to speak in court about the fairness of the Settlement. See FAQ 11.


If you do nothing, you will not receive any benefit from the setlement, but you will stiill give up your rights to sue Costco and its educational clients as descbribed in FAQ 10.