What is the REI Dividend?

The dividend is a sum of money that is awarded back to REI co-op members every year. The amount of money is based on two primary factors: a percentage of all eligible purchases made by a member and any rewards they accrued on their REI Mastercard during the previous year. You can think of it a bit like a tax return and purchasing points on your credit card — only instead of frustrating points, it’s just money. You can also get any unused amount of the previous year’s dividend added onto the next one, but this isn’t always the case.

REI is short for Recreational Equipment Incorporated, an American company that offers outdoor gear, as well as courses and vacation options.

If you aren’t familiar with their brand, they are known for having high quality and ranked highly in the review of the top tent brands on the market.

What sets it apart from other outdoor retailing competitors is that it follows the co-op business model. That means they offer a wide range of perks to their members, one of the most unique of which is their annual dividend. Since this is such an unusual benefit to the company, understanding the ins and outs can be difficult. So, here are some answers to many of the FAQs people have when talking about the REI annual dividend program.

REI, also know as Recreation Equipment International, is well-know for its outdoor supplies.

How do you earn the dividend?

First of all, only REI co-op memberships can earn a dividend. The good news is that being a member of the REI co-op is both inexpensive and easy. To become an REI member, all you have to do is go here and sign up for a lifetime membership. The upfront, one-time membership fee is only 20$, and there isn’t even an annual fee to keep your membership. However, only members that are considered active receive a dividend notice.

To be an active member of REI, all you have to do is spend at least 10$ merchandise in a year, unless it is the year that you first sign up. If you ever lose active status, getting it back is as easy as to resume making REI purchases.

REI Members earn toward their annual dividend by making eligible purchases. Almost any merchandise you buy directly through REI is considered eligible as long as you are purchasing full-price items. This includes the physical REI stores or through REI.com. One notable exception is that gift cards do not count toward your REI dividend. However, when you use a gift card to make purchases, that can be considered eligible as long as it otherwise would be.

The percentage that goes back into your dividend varies depending on how well the company did financially the previous year, but it tends to be around 10%. The calculation is made based on the product price alone, so sales tax and any other fees such as postage are not counted.

Unfortunately, none of REI’s experience purchases are considered eligible. This means that classes, special events, and the popular REI Adventures don’t get counted into your annual dividend. Service charges don’t count either, so rentals and labor fees are not factored into the dividend. The initial membership fee also is not eligible.

Any returns you make are removed from your dividend amount in the final calculation, and if it has already been calculated, then the dividend amount counts against the return amount you would receive. 

You can also receive a retroactive addition to your dividend based on eligible purchases you made at other retailers on REI merchandise, as long as it was in the same year. For example, if you bought backpacking equipment from Amazon that was the REI brand, then you can get that counted. You’ll just need to have your receipt handy to answer some information about the purchase. You cannot get retroactive additions to your annual dividend if the purchase was made before you became an REI member, though.

There is a slight workaround with the discounted merchandise, though. Members can receive an REI co-op Mastercard. As mentioned earlier, this has a built-in rewards system. One such reward is that when you use the REI credit card to purchase sale items, then you receive a 5% kickback into your dividend. It’s a much lower percentage than what you would expect to receive from a normal eligible purchase. However, savvy shoppers will be able to notice when the reduced pricing and smaller kickback turns out to be a better long-term value. 

When would I receive my REI dividend?

If you’re an REI member and have a balance, you’ll receive a dividend notice in March of the next year. All purchases you make from January 1st to December 31st are considered part of the same annual sum and will be available until January of two years later. So, if you made purchases throughout 2020, you’ll be able to use your dividend from them starting March 2021, and you’ll have the money available to you until you either spend it all or until the first day of 2023. This, however, is only the case if you don’t accrue any more dividends. Assuming you constantly make enough eligible purchases and spend roughly however much you earn from the program each year, your dividend balance should never expire.

Buying equipment from REI with an REI Mastercard is a great way to earn points towards your dividend.

So what can I do with the dividend?

This question is best answered with another question: “How do you want to spend your money?” For anyone who has ever been frustrated with trying to redeem credit card points or dealing with the restrictions of store credit, you are going to be blown away by the range of options REI gives you when it comes to your member dividend.

Use the dividend as store credit

The most basic option available to you is to use your dividend like store credit. If you can find it on the REI website, then you can buy it with your store credit. If your dividend balance doesn’t completely cover the total price of your purchases at checkout, don’t worry. It will still get deducted from the price and you’ll only have to pay for whatever is leftover.

If you’re near one of their physical REI stores, then you’ll be able to use your dividend to directly buy available outlet items from their stores. Your dividend works at every REI store location, so you won’t have to worry about not being able to access it if you’re shopping far from home. Just be sure to have your co-op member number ready. 

Even though buying them doesn’t sound toward your dividend, you can put your earnings on it toward booking an REI Adventure. If you’re a hardcore outdoors enthusiast, then you might be able to generate enough of a dividend to book a trip to a national park at no out-of-pocket expense.

If you aren’t quite that adventurous but still would like a fun experience, then look at spending your dividend on one of the many REI classes. There is something to learn for everyone. From riding a bike to navigating the backcountry, the basics of rock climbing to dozens of stewardship opportunities,  it’d be hard not to spend part of your dividend on enriching yourself with the REI classes.

You can also download the REI mobile apps. These make it even easier to shop with REI in general, but they can streamline the process of using your dividend in the online store.

Receive the dividend as a check

If you’d rather take the money that REI has awarded to you elsewhere, then you can request to have your dividend amount in the form of a check.

There are a couple of ways to go about getting the check. The most direct way is to go to a physical REI outlet once you have received a notice of a dividend balance. If you are not anywhere near an REI store, don’t worry. You can have your check mailed to you directly by filling out their request form. Once you have the form filled out, REI will have that information in their database and can mail you the check every year without any extra work from you, should you want that

The check can only be issued to the name of the primary membership cardholder. REI does not send out checks if your annual dividend does not exceed 25$, and they do not send out a check for the REI Mastercard holder reward amount that does not exceed 1$. You can request the check whenever is convenient, but they do not begin mailing them out until July 1st. 

You don’t have to receive the whole dividend as a check. You can go ahead and spend part of it as store credit on the online store. Then, whatever amount that is leftover, you can have it sent as a check. As long as all the other requirements have been met, of course. Also, if you attempt to use any of your dividend between the time of the check being sent out and you receiving the check, then it could result in either the check being void, or you being unable to use your dividend funds at all.

If for some reason you don’t want to use the online check request form, you can also make the request over the phone or by contacting them by mail.

You can get your REI dividend in cash or in purchase credits.

Get the dividend in cash

No, that’s not a joke, and there aren’t any strings attached. You can receive your annual REI dividend, in full, as cash. There are a few hoops you have to jump through, but none of them are fine print details that are going to keep you from turning your dividend sum into cash and doing whatever you want with it.

First of all, you can’t convert your dividend into cash after July 1st of the year after you earned the dividend. This is similar to the check option. Unlike the check, there is a cut-off point at the beginning of the next calendar year, so if you wait too long then your dividend can’t be turned into cash.

This option can only be done through a physical REI store, so if you don’t live near one then you will probably have to settle for the check option. If you plan on going to a store to get your dividend as cash, it would be a good idea to call them ahead of time and try to make an arrangement. REI stores only have so much free cash on hand. 

If you don’t call ahead, you might run into a situation where the store does not have enough cash to equal the dividend balance you should receive. In these cases, co-op members are given the option to receive the check. For some, that is a fine alternative, but people dead-set on getting cash should be aware of this.

One other thing to note is that the cash option is based on a specific year’s balance. This means, like the check option, if you spend any of your dividend funds as credit first, that would result in you receiving less cash in the end. Also, unlike the store credit option, you can’t compound years together. Since the years have cutoff dates that line up to where there is never an overlapping period between them, you’ll only be able to get your cash balance one year at a time, rather than building it across up to 3 years.

Can I check my dividend balance?

Yes! At any point, you can go to REI.com, and enter the name on your membership card along with your member number, and they will be able to tell you the dividend balance. This is not updated in real-time, so if you have been roughly keeping track and the amount looks odd when you check it, don’t worry. Most likely, it is just in the middle of being exactly calculated by members of the REI team.

Is the annual dividend the only benefit of Coop Membership?

Not at all! You’ve already read a bit about the REI Coop Mastercard and its reward system. You get 5% back with any REI purchases, 2% back through mobile transactions, and 1% everywhere else. This is all factored into your annual dividend along with all the usual 10% kickback from buying normal priced items. This means that anything you use the card on, even bills and groceries, is factored into your dividend.

Members get access to special pricing on certain items through REI. These are usually on things like classes and tours, as well as rentals on any outdoor equipment. This can be frustrating since the specially priced experiences aren’t dividend eligible purchases. Though, with dividend earnings and special pricing, it is easy to earn enough to pick up enough to pay for a class or two. 

Members-only events are probably the second-best part of being a member after the dividend. Some of the most popular of these events are new member-exclusive hiking trips or member gatherings to try out local brews. Without a doubt, Garage Sales are the star of members-only events.

The REI Garage Sales are hosted at REI outlet stores every so often. The merchandise of the Sales is made up of returns and other used goods, and come at a heavily discounted price. The products are as-is, and cannot be accepted for returns as of their return policy. Since the merchandise is on a case-by-case basis with the outlets, REI cannot guarantee specific inventory. All Garage Sales operate on a first-come, first-serve basis. Garage Sale purchases cannot be put toward your annual dividend unless they are purchased with the members’ Mastercard. Though, the products are usually so aggressively marked down that it usually makes up for it. Plus, the Garage Sale merchandise is evaluated beforehand to assure that there are no major issues with it, so you don’t have to worry about the quality with the low prices.

Final Verdict:

The annual dividend is a unique benefit of being a member of REI’s coop. It saves the frustration associated with other rewards programs by just allowing the members to claim a monetary incentive. It is both pleasantly simple, offers multiple options to use your dividend as you see fit, and a great tool for people that love to maximize value in their shopping.

There are some ins and outs with the membership program to remember how to get the most out of the dividend. Though, remembering these details is more of a bonus than a requirement to earn on the dividend properly, unlike other rewards programs. On top of all that, you get several more awesome benefits for a single 20$ purchase. 

Bonus tip: Here’s a video from REI talking about the essential items for backpacking, which are available on their website: