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It seems that it would make good sense to purchase a warehouse store membership because it translates to savings on so many items. Yet, it does bet the question of whether or not they are actually worth the expense. In this article, I’d like to take the time to consider if paid memberships to places like Costco are worth it, or if you are better off going the coupon, rebate and comparison shopping route instead. After all, if you are like me, you might think “Is membership to BJ’s worth it, or can I save a lot more by becoming one of those super couponing people?”
Let’s find out…
By “it” in the question above, I mean the cost of membership. As one money expert said, “any membership fee can pay for itself if the prices in the store are low enough – and if you buy enough for your annual savings to add up to” more than that membership fee. Yet, it is pretty challenging to know if that math does prove the warehouse memberships to be worth it.
After all, you need to know a few things to do the math. For example, what does that membership cost you annually? Are the store’s prices the best available on a per item, rather than bulk, basis? Do they make the products and brands you favor available or a premium in-house brand that might be even better?
It helps if you understand just how warehouse stores even work in the first place, too.
The model that they operate on is entirely different from big box stores like Walmart. As an example, Walmart will earn profits from buying in enormous quantities at deep discounts and then marking up their goods. Each consumer sale yields the store’s profit on the individual units.
Warehouse stores, on the other hand will not markup their goods to the same extent as a big box store, and will charge that annual membership fee as the way to boost profits. So, you pay up front to gain entry to the store and then get products at what are supposed to be the lowest prices imaginable. Current models also find warehouse stores offering discounted deals on other products such as discounted travel, prescriptions, eye care, car purchases and more.
What is the difference in markups? The traditional big box stores like Walmart and Target will usually bump up their prices around 25-50%, while most warehouses keep markup at 14% or less. This can add up to a substantial savings, at least according to one report from Consumer Reports that indicated that membership at Sam’s Club, BJs or Costco are worth it because they can let you get groceries for more than 20% less than regular chain store prices. However, it is important to note that most avid warehouse shoppers say that they still have to hit the grocery stores and big box stores for other goods because you cannot always get the best prices on everything you need or want.
Other benefits that would make a membership to Costco, Sam’s Club or BJ’s worth it would include their unique services that can include everything from health screenings and discounted movie passes to best possible pricing on vehicles, tires, eye care and much more. They can save time with these services, enabling you to do errands as diverse as getting gas, new tires on the car, booking travel and pharmacy or eye care in a single trip. With snack bars, they can even include a discounted “lunch out” during your day of errands.
Consumers and consumer product agencies often rate the warehouse brands as superior, too. The Kirkland brand that belongs to Costco is one of the most consistently high rated names and wins awards across the board for household products like batteries as well as foods such as nuts or spices.
Most warehouse memberships are worth it also because they offer “experiences”. Consumers are becoming more aware of their wish to have more than just palettes or shelves of goods and the warehouse chains are stepping up with more and more free samples and displays, consumer friendly floor plans and ample room to explore the goods.
And if you are a fan of unique headlines, you would see that membership at Costco is worth it for superior return policies alone. Why? At the end of 2017, consumers were astonished to read about a gutsy shopper who returned their dead and (obviously) used Christmas tree to the store, where they were granted the guaranteed refund! Yet, it is not Costco alone with excellent and lenient returns policies, Sam’s Club also has superior policies, particularly where fresh foods are concerned. You can opt to return a fresh food item for double the price back, or get the original price plus a replacement.
So, in looking at all of that, it would seem that memberships to Costco, Sam’s Club or BJ’s worth it. Yet, there are always the “cons” to the many “pros”. For instance, you do have annual membership fees to consider with prices ranging from $45 to $55, as well as top tier memberships that cost more but let you earn cash back on your purchases.
“Aha!” you might say, “Cash back means you can easily earn back the price of membership!” And normally, I would agree, except most of them would require huge expenditures before you evened out the expense. For instance, let’s say you go for a Costco Executive Membership. With it, you get 2% on all purchases. That would mean you had to spend around $2500 to break even!
Another of the cons of a paid membership is that you have to purchase in bulk. That’s great if it is items with lengthier shelf lives, such as detergents, but it might also mean buying a two pound brick of cheese that could spoil, or an enormous flat of pastries or raw meats that then have to be frozen to avoid spoilage. Even if used, their loss of freshness and the pace of consumption may not add up to actual savings.
And most warehouse stores are noted as dangerous places for the impulse shoppers of the world. Designed with appealing floor plans, they take you through aisles of necessary items and also lead you straight to aisles of candies, clothing, books, electronics and other goods that you don’t need and which may be too tempting to resist.
Finally, and here’s a big downside for me, they are unfriendly to those who like to use coupons. Neither Sam’s Clubs or Costco stores accept manufacturer coupons (though they both have their own coupons and deals). BJs does accept paper coupons, but is not noted for “stacking” them.
That means that you can often find grocery items at much lower pricing in traditional grocery stores, especially if you are going to stack coupons and get them for pennies on the dollar.
Sadly, you cannot often just waltz into these stores to do some initial comparison shopping or even get a feel of whether or not they are a good fit for your household’s needs. The good news is that you can often get free warehouse membership opportunities.
Because there are so many pros and cons, and because memberships can be pricy, it is best to use any free warehouse membership opportunities to scout out each of the stores in your area, make some notes, do some pricing comparisons and just get a good feel of whether or not you even like shopping in one of the stores. While it is entirely possible to just piggyback into any warehouse store with a friend who has a membership, there are reasons to avoid this. Separate checkouts are not possible, you pay the friend cash (losing any cash back options with your credit card) and are limited to times and dates when they can go. Plus, few friends want to spend the time it takes for you to make notes on all of the items you need to explore or consider in comparison shopping.
Instead, you can use free warehouse membership opportunities. Both Sam’s Club and BJs are great for day passes (and you can also use guest registrations to shop at their websites), and Costco lets you shop in any of their stores if you receive or own a Costco gift card. You can ask a friend to purchase one of the gift cards during a visit to Costco, but gift card exchange sites and eBay are also good spots for finding them.
Of course, BJ’s is now becoming famous for its free warehouse membership opportunities, as well. They offer anywhere from 60 to 90 days of free membership at most times of the year, and there are zero restrictions on what you can do with it. This may be a great way to go ahead and test drive the use of a warehouse store for your household’s needs.
It is also a great way to make the very most of a free warehouse membership opportunity by employing some of my top tips for getting the most out of any warehouse store.
So, if you want to make the very most out of your freebie day or months of warehouse membership, I suggest you:
In the end, warehouse stores can save you a lot of money, but they are not for everyone. You should make the most of a free warehouse membership using the tips here. Whether it is a gift card to Costco, a free day pass or the 60-90 days that BJs offers, you can really figure out if membership is for you, or if you are still going to use the couponing tips we so often emphasize to save money and reduce debt.
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