Yes, you can use your HSA card at Costco. The warehouse, Costco.com, and the same-day delivery service all accept Health Savings Account debit cards, and so do the pharmacy, optical, and hearing aid counters inside the store. The catch is what you’re allowed to put on the card: only items and services the IRS treats as qualified medical expenses. Everything else in your cart has to go on a different form of payment.
How the Card Is Accepted at Checkout
Costco warehouses accept debit and ATM cards alongside Visa, cash, checks, and Costco Shop Cards.1Costco. Member Privileges and Conditions HSA debit cards run through those same debit networks, so they work at the register like any other bank debit card. Costco’s Visa-only credit card rule doesn’t apply, because an HSA card isn’t being processed as credit.
The practical move is to separate your eligible items from everything else before you reach the register. If your trip includes groceries, paper towels, and a box of bandages, ring up the bandages on your HSA card in one transaction and pay for the rest with a personal card. If your HSA balance won’t cover the full eligible total, most registers will let you split the payment across two cards.
What You Can Buy With Your HSA at Costco
The IRS defines a qualified medical expense as an amount paid for the diagnosis, treatment, or prevention of disease, or for anything that affects a structure or function of the body.2Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses On Costco’s shelves, that covers first-aid supplies like bandages and digital thermometers, hot and cold therapy packs, and blood pressure monitors.
Since the CARES Act took effect in 2020, over-the-counter medications no longer need a prescription to qualify for HSA reimbursement. Pain relievers, allergy medicine, and antacids are eligible. Sunscreen is regulated by the FDA as an over-the-counter drug and falls under the same rule. Menstrual care products — tampons, pads, liners, cups, and similar items — also became qualified medical expenses under that law.3Internal Revenue Service. IRS Outlines Changes to Health Care Spending Available Under CARES Act
Vitamins and supplements generally do not qualify, because the IRS treats them as products for general health rather than treatment of a specific condition. The exception is when your doctor writes a letter of medical necessity stating that a particular supplement is required for a diagnosed condition. If you plan to buy vitamins at Costco with HSA funds, get that letter first and keep it with your records.
Costco often marks eligible products directly. Price tags and product pages carry “HSA/FSA Eligible” labels, and the online store lets you filter for eligible items in the health and medicine categories. Looking for those markers as you shop takes the guesswork out at the register.
Pharmacy, Optical, and Hearing Aid Center
Costco’s in-warehouse medical departments are where an HSA card tends to work hardest. Each of these counters rings up transactions separately from the main registers, which keeps your medical spending cleanly divided from anything else in the cart.
Costco Pharmacy
Prescription medications filled at the Costco pharmacy are qualified medical expenses.4Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans Pay at the pharmacy counter with your HSA card for anything your doctor has prescribed.
Optical Center
Eye exams, prescription eyeglasses, prescription sunglasses, and contact lenses all qualify.5Internal Revenue Service. Topic No. 502, Medical and Dental Expenses Reading glasses qualify too when they correct your vision. The optical department processes payment at its own counter, so the charge stays limited to vision items.
Hearing Aid Center
Hearing aids are explicitly listed by the IRS as a deductible medical expense.5Internal Revenue Service. Topic No. 502, Medical and Dental Expenses Costco’s Hearing Aid Centers label their products and services as HSA and FSA eligible, and batteries, accessories, and custom earmolds are available at the same counter.6Costco. Costco Hearing Aid Center
Using Your HSA Card on Costco.com
Costco.com and the same-day delivery service accept HSA and FSA cards as payment. At checkout, choose the FSA/HSA payment method and enter the card number, expiration date, and CVV. The Health and Medicines section has a filter for FSA-eligible products so you can browse only what your card is allowed to cover.
The same rule applies online as in the warehouse: only qualified medical expenses can go on the HSA card. If your online cart mixes eligible and non-eligible items, place separate orders or use a different payment method for the non-medical products.
What Does Not Qualify
The most common Costco mistake is assuming that anything health-adjacent counts. A few categories are clearly off-limits.
- The Costco membership fee itself. The annual Gold Star membership costs $65 and the Executive membership costs $130, and neither is a medical expense, because the fee buys warehouse access rather than care.7Costco. Join Costco
- General personal care. Regular soap, toothpaste, shampoo, and cosmetics are personal hygiene products, not medical care. Medicated versions, like acne treatment washes or anti-dandruff shampoo, can qualify as OTC drugs under the CARES Act changes.
- Groceries and household supplies. Food, cleaning products, and paper goods are never eligible, even when they ride along with medicine in the same trip.
- Fitness equipment bought for general wellness. A treadmill or yoga mat only becomes eligible with a letter of medical necessity from your doctor for a diagnosed condition.
The line between “medical” and “personal care” often turns on the product’s purpose rather than the aisle it sits in. A medicated cream for eczema qualifies; the same brand’s regular moisturizer does not. When in doubt, look for the HSA/FSA label on the product or shelf tag.
What Happens If You Use the Card on the Wrong Thing
If you pay for a non-qualified item with HSA funds, the amount is added to your taxable income for the year and hit with an additional 20% tax.4Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans On a $100 non-qualified purchase, you would owe income tax on that $100 plus a $20 penalty. The penalty applies regardless of whether the mistake was intentional.
One exception matters: once you turn 65, the 20% additional tax goes away. Non-medical distributions after 65 are still included in your taxable income, similar to a traditional retirement account withdrawal, but the extra penalty no longer applies. The same exception applies if you become disabled.
Fixing an Accidental Charge
If you accidentally pay for something ineligible with your HSA card, you can repay the money as a mistaken distribution. The IRS allows this when you reasonably but incorrectly believed the expense qualified, and the repayment must happen no later than the due date of your tax return for the year you discovered the error. When you repay under this rule, the distribution isn’t included in your income, isn’t subject to the 20% penalty, and doesn’t count against your annual contribution limit.8Internal Revenue Service. Instructions for Forms 1099-SA and 5498-SA (12/2026) Contact your HSA administrator to process it; most have a specific correction form so the repayment is coded properly.
Returns and Refunds
If you return an HSA-purchased item to Costco and receive a refund, that money needs to go back into your HSA. Depositing it into a personal checking account instead could create a taxable distribution. Route the refund through your HSA administrator using the mistaken distribution process, which keeps it from counting against your contribution limit.
Keeping Receipts
Your card swipe alone does not prove a purchase was medical. You need itemized receipts showing what you bought, the date, and the amount.4Internal Revenue Service. Publication 969 (2025), Health Savings Accounts and Other Tax-Favored Health Plans The IRS wants records showing each distribution paid for a qualified expense, that the expense wasn’t reimbursed by insurance, and that you didn’t also claim it as an itemized deduction.
Standard guidance is to keep tax records at least three years from the date you file. Because HSA funds roll over indefinitely and you can reimburse yourself for past medical expenses at any time, many account holders keep HSA receipts far longer. Scanning receipts with your phone or using a tracking app is the simplest way to stay organized. If the IRS audits and you cannot document that a distribution paid for a qualified expense, that amount gets reclassified as taxable income and may trigger the 20% penalty.