Costco is facing an active federal class action lawsuit over how it handles membership auto-renewal notices and privacy. The lawsuit, filed in March 2026 by California resident Russel George II, alleges that Costco violated California’s Automatic Renewal Law by sending renewal notices too far in advance—60 days before charging a member’s card—and failing to provide clear cancellation instructions. George’s case centers on his $65 Gold Star membership, which auto-renewed in January 2026 without what he claims was adequate notice. As of July 2026, the lawsuit remains ongoing with a preliminary hearing scheduled for June 2026, and no settlement or damages have been awarded yet.
The claims in this lawsuit reflect a broader pattern of auto-renewal disputes across retail and subscription businesses, but Costco’s case is notable because it directly challenges compliance with state law that most consumers don’t know exists. Unlike some companies that offer automatic renewal as an opt-in feature, Costco defaults memberships to auto-renewal unless you actively request otherwise. The lawsuit argues that Costco’s timing and disclosure practices don’t meet California’s legal standards, which require companies to send renewal notices 15 to 45 days before charging—not 60 days. Understanding these claims matters if you’re a Costco member, especially if you’ve been charged unexpectedly or received renewal notices that lacked clear information about your membership cost or how to cancel. This article breaks down what the lawsuit alleges, your actual cancellation rights under Costco’s current policy, and how California and federal law intersect in auto-renewal disputes.
Table of Contents
- What Is the Costco Membership Auto-Renewal Lawsuit?
- The Notice and Disclosure Requirements That Sparked the Lawsuit
- How California’s Automatic Renewal Law Protects You
- Your Right to Cancel and Get a Full Refund
- The Federal Court Ruling That Changed Auto-Renewal Regulations
- What Is the Current Status of the Lawsuit?
- Why Timing Matters: The 15–45 Day Notice Window
What Is the Costco Membership Auto-Renewal Lawsuit?
The lawsuit, officially a class action filed in U.S. District Court for the Northern District of California, alleges that costco‘s auto-renewal process violates California’s Automatic Renewal Law, often referred to as CalAB 2863. The plaintiff, Russel George II, is seeking to represent all California consumers whose Costco memberships auto-renewed without compliance with the law’s specific notice and disclosure requirements. His case involves a $65 Gold Star membership that renewed in January 2026, and he alleges he did not receive proper notice of the renewal charge, the terms of the renewal, or clear instructions on how to cancel. Because this is an ongoing class action with no settlement announced as of July 2026, no payments have been made to class members and the litigation is still in its early stages.
The lawsuit identifies three specific alleged violations. First, Costco allegedly sent George’s renewal email 60 days before the charge, which exceeds the 15–45 day window California law mandates. Second, the renewal notice allegedly lacked a clear statement of the exact amount that would be charged. Third, the notice allegedly failed to provide clear cancellation instructions or missing renewal terms and conditions. These claims apply to both the Gold Star ($65) and Executive ($130) membership tiers, potentially affecting tens of thousands of California members. The preliminary hearing scheduled for June 2026 will determine whether the lawsuit proceeds and whether a broader class certification is granted, which would allow other members to join as plaintiffs.
The Notice and Disclosure Requirements That Sparked the Lawsuit
California’s Automatic Renewal Law (CalAB 2863) was designed to protect consumers from surprise charges and hidden renewal terms. The law is simple but specific: before charging a customer for an automatic renewal, a company must send a renewal notice that clearly states (1) the amount to be charged, (2) the terms of the renewal, (3) the date the charge will occur, and (4) a simple and easy-to-use mechanism to cancel. The law also specifies that this notice must arrive between 15 and 45 days before the charge is made—not weeks in advance, which can make cancellation requests get lost or forgotten. A key limitation of this law is that it only applies to California residents.
If you live outside California, the Automatic Renewal Law does not protect you, even if your Costco membership auto-renews. Other states have similar laws (New York has its own auto-renewal law, for example), but they vary in their specific requirements. For Costco members in non-California states, protection depends on whether federal regulations apply or whether your state has enacted similar legislation. The FTC attempted to establish nationwide auto-renewal rules in 2024, but a federal appeals court struck down the FTC’s rule in July 2025, finding the agency failed to follow proper rulemaking procedures. This means that, as of now, auto-renewal protection varies dramatically by state, and many consumers outside California have limited legal recourse if a company like Costco auto-renews their membership without proper notice.
How California’s Automatic Renewal Law Protects You
Under California’s law, the core protections are straightforward: you cannot be charged for an auto-renewal without clear advance notice, and you must be given a simple way to cancel. The law applies to any “recurring charge” that consumers authorize, including Costco membership auto-renewals. A recurring charge is defined as any charge that occurs more than once as part of a pattern, which definitely includes Costco’s annual membership cycle. If a company violates the law—for example, by sending notice too far in advance or without clear cancellation instructions—you may be entitled to a refund of the charge plus statutory damages under California’s consumer protection laws.
The lawsuit against Costco specifically challenges whether a 60-day notice window complies with the 15–45 day requirement. Costco’s argument (which has not yet been tested in court) would likely be that a longer notice period gives members more time to cancel and is therefore more consumer-friendly. However, California’s law sets the 15–45 day window as a mandatory standard, and the law does not include an exception for companies that provide extra notice time. If the court agrees with the plaintiff, it could mean Costco violated the law for every member whose renewal notice was sent more than 45 days in advance. That said, it’s important to note that a violation does not automatically mean Costco owes you money—damages in class actions are determined based on the court’s ruling and any settlement negotiated afterward, which has not happened yet as of July 2026.
Your Right to Cancel and Get a Full Refund
Costco’s published membership cancellation policy provides what the company calls a “full refund guarantee,” which applies regardless of whether the auto-renewal lawsuit succeeds. Costco will refund 100 percent of your membership fee ($65 for Gold Star, $130 for Executive) at any time, for any reason. You do not need to provide a reason, and Costco does not require you to have used your membership benefits to qualify for the refund. This is Costco’s stated policy and is separate from any legal outcome of the auto-renewal lawsuit. Costco offers multiple ways to cancel and request a refund: you can visit a warehouse and speak to the membership desk, call 1-800-774-2678 and speak to a live agent, or submit an online Auto Renewal Refund Request form through Costco’s website.
To avoid being charged for a renewal, you must cancel at least 72 hours before your renewal date. However, if you are charged within 48 hours after submitting a cancellation request, Costco’s policy states that the refund will be automatically processed within 2 business days. The catch is that these are Costco’s internal policies—they go beyond what California law requires. California’s law only mandates that a company provide a cancellation method that is as easy to use as the original enrollment method. If you signed up for auto-renewal online, for example, the law requires an online cancellation option, though companies can also offer phone or in-person cancellation as an alternative. Costco’s offering of all three methods exceeds the legal minimum, which is actually a point in the company’s favor if the lawsuit proceeds.
The Federal Court Ruling That Changed Auto-Renewal Regulations
In July 2025, a federal appeals court issued a significant ruling that struck down the FTC’s nationwide auto-renewal rule. The rule, introduced by the Biden administration in 2024, would have set federal standards for auto-renewal disclosures and required companies to obtain affirmative consent before charging. However, the court found that the FTC did not follow proper rulemaking procedures under the Administrative Procedure Act and therefore lacked authority to implement the rule unilaterally. This ruling created a regulatory vacuum: there is no longer a federal auto-renewal standard that applies across all 50 states. The practical implication is that companies now operate under a patchwork of state laws rather than uniform federal rules.
California’s Automatic Renewal Law remains in effect within California, but companies like Costco do not face a unified federal compliance framework. This creates an incentive for companies to comply with the strictest state standard (typically California) in order to avoid navigating 50 different sets of rules, but there’s no legal requirement to do so outside of each state’s borders. For consumers outside California, this means less protection than the FTC rule would have provided. The Costco lawsuit, filed in March 2026, occurred after the federal rule was struck down in July 2025, which means the case is entirely based on California state law. If the plaintiff wins, the ruling would apply only to Costco’s California members and practices, not to a nationwide standard.
What Is the Current Status of the Lawsuit?
As of July 2026, the Costco membership auto-renewal lawsuit remains ongoing with no settlement announced. The lawsuit is still in the early stages of litigation, with a preliminary hearing scheduled for June 2026 (or shortly thereafter, depending on court scheduling). At a preliminary hearing, the judge will review the plaintiff’s complaint and determine whether the case should proceed and whether class certification should be granted—meaning whether the court will allow Russel George II’s case to represent all affected California Costco members. No class has been officially certified yet, no settlement has been negotiated, and no class members have received any compensation as of July 2026.
This means that if you are a Costco member who experienced an auto-renewal charge, you do not currently have a settlement to file a claim with related to this lawsuit. The case could take months or years to resolve. During that time, Costco continues to operate its auto-renewal process under its existing policies, including the 60-day notice requirement and the full refund guarantee. If you want a refund now, you must request one through Costco’s standard cancellation process, not through the lawsuit.
Why Timing Matters: The 15–45 Day Notice Window
The 15–45 day notice window is the core of the dispute in this lawsuit, so understanding why it exists under California law is crucial. The law’s framers chose this window to balance two competing interests: giving consumers enough advance warning to cancel if they want to, but not so much advance notice that the reminder gets lost or forgotten. Sixty days—Costco’s alleged practice—gives consumers nearly twice the maximum allowed window.
In theory, this should make it easier for consumers to remember to cancel before the charge occurs, but California’s law treats it as a violation regardless of intent. The lawsuit also raises a practical question: if sending notice further in advance is bad because it’s too far ahead, how should companies time notices for maximum compliance? The answer, according to California law, is somewhere in the 15–45 day window. Companies that send notices closer to the 15-day mark argue they give consumers enough time but not so much that notices are forgotten; companies sending near 45 days argue they maximize the cancellation window. Costco’s 60-day approach appears to assume that more notice is always better, but California’s law treats the 45-day limit as a hard deadline, not a target.