Costco – The Pros and Cons

 Posted by on August 27, 2012  Add comments  Tagged with:
Aug 272012

We just purchased our first Costco membership. We’ve never been members of any wholesale buying club before, because I once had a day pass to Sam’s Club, and I was unimpressed. I took my price book along, compared unit prices, and determined that the savings weren’t significant enough to justify the membership fee. Also, we were only a family of 3 at that time, so I didn’t think that we’d benefit from bulk packaging, and might actually lose money on perishable items if we couldn’t use them up fast enough.

However, now that our family has grown from 3 to 5, I decided to investigate wholesale buying clubs again, and I was particularly interested in Costco, for several reasons:

1) There’s no risk. If at any time you’re dissatisfied, they’ll refund your membership fee in full.
2) I make digital scrapbook layouts, and they print 12×12 photos for only $2.99 each. I can’t find any other local photo center that will print that size in store.
3) I’d heard that they have a high-quality store brand (Kirkland), and was anxious to try the Free and Clear laundry detergent, because this is the only kind we can use, and I was told that the Kirkland brand is comparable to Tide in terms of cleaning power.
4) I’d also heard that they have good quality meats, and a nice selection of reasonably-priced organic produce.

On Saturday, we made our maiden voyage to Costco, and our feelings were mixed. If you’re considering the purchase of a Costco membership, I’d like to share with you what I feel are the pros and cons. Your experience may vary, but at least you’ll be informed going in.

-Indoor parking. We were all very impressed with the brightly lit, clean, convenient indoor parking ramp. In our neck of the woods, this is a real advantage because the weather is rainy in the spring/summer, and cold and snowy in the winter, so loading groceries in the van with 3 little kids in tow isn’t very fun.
-Inexpensive food and drinks in the food court. You can’t beat a 20-ounce fountain drink with free refills while you’re in the store, for only 59 cents! They also have a 1/4 pound, all-beef hot dog special, which includes a drink, for only $1.50 (however, the hot dogs were, as my husband refers to them, “gut bombs.” We all had indigestion the whole rest of the day, so we’ll probably never buy them again).
-Reasonably-priced gasoline. For us, the price per gallon was exactly the same as what we pay locally ($3.55), so it wasn’t a perk for us, but for people living in the city where Costco is located, it probably is.
-$59 eye exams. However, Wal-Mart offers these as well.
-Friendly, helpful staff. They even unload and reload all your stuff at checkout, which for me, is a HUGE advantage, since I always have at least one crabby, impatient kid with me.
-The samples. The kids LOVED this. And we’re not just talking packaged, processed food samples, but pork chops, hamburgers made with the store’s ground beef (so you can tell if it’s good before you buy), white peaches, Annie’s Organic shells and cheese, danish from the bakery, lemonade. You could probably eat enough samples to qualify as a meal, if you worked hard enough at it.
-Quality merchandise. Lots of name brands, if that’s important to you. It isn’t really to us – we buy mostly generic – but there are a few products that we prefer to buy name-brand.
-Quality, affordable photo printing. I had one 12×12 layout printed as a test, and I was pleased with it, so I sent all of my other layouts to be printed. 4×6 digital prints are 13 cents each.
-A fantastic return policy, and a double satisfaction guarantee. They also offer high-dollar member coupons each month, and a $10 cash card for new Costco members.
-On some items, the unit prices are fantastic. Here are some examples from what I purchased:
1. Nestle semi-sweet chocolate chips – 72-ounce bag, for $9.99. This is equivalent to (6) 12-ounce bags for only $1.66 each. Aldi generic chocolate chips, which are just OK, are the cheapest I can buy locally, and they’re $1.79 for 12 ounces. I bake from scratch often, so I stocked up on these giant Nestle packages, and put them in my freezer.
2. Folgers coffee – 48 ounces for $9.99 after member coupon. This works out to $3.33 a pound.
3. Pure vanilla extract – 16-ounce bottle for $6.79, or 42 cents per ounce. A 2-ounce bottle at Aldi is $1.99, or $1 an ounce. So the Costco brand is less than half the price.
4. Organic quinoa – 4 lbs for $7.99. This is a terrific price per pound for this high-protein grain. I paid this much for less than 2 pounds of non-organic quinoa at Target.
5. Frontline Plus flea and tick medicine for cats – $35.99 for 3 treatments. We usually buy this at Petsmart, and even with our PetPerks card, it’s still $52.99.
6. HP ink – My husband has a top-of-the-line, all-in-one printer for his work, and we don’t buy remanufactured or refilled cartridges for it (we suspect that these may have ruined his old, cheap printer). His ink cartridges are very expensive, but we saved $13.00 on a high-yield, black cartridge 2-pack, and $14.00 on a high-yield, tri-color pack.

(*Note – Costco also refills certain ink cartridges with new technology that removes air from the chamber before filling, so you get more bang for your buck. The cost is a very reasonable $7.99 per cartridge).

So, we saved $44 on 2 items that we typically buy (ink and Frontline Plus), which is almost enough to pay for the $55 yearly membership. And this was only our first visit.

-Selection is limited. For example, our Costco carries no 1% milk, unbleached flour, or brown rice, and only one brand of several items on our list, including dental floss, apple juice, feminine products, and cat litter. These were either brands we don’t like, or they were more expensive than what we typically buy, so we had to stop at another store to get those items.
-Most prices were unremarkable. I bought no meat, because I can buy good quality meats much cheaper elsewhere, and the produce prices were just OK. The milk was actually more expensive ($2.59) than the brand I usually buy which, like the Costco brand, is free of growth hormones.
-The bulk packaging can be a money-waster. For example, I bought very little produce because my family can’t eat 5 pounds of grapes before they start to spoil. We did buy 5 pounds of clementines, and 2 of the 4 my husband ate this morning were bad (I’ll be returning them).
-The store is ginormous, and difficult to navigate. It’s organized by general categories, but the aisles are unmarked, so you have to wander up and down every aisle to see what they have. This is partly due to the fact that the merchandise selection is constantly changing, but it’s also their way of keeping you in the store longer so you spend more. We were all very tired by the time we finally left, 2 1/2 hours after we got there.
-You have to pay to shop there, and spend more to save more. Also, it’s very easy to spend far more than you typically would. We only bought items we needed, and would buy anyway, but because you’re shopping in bulk, your total adds up quickly. Ours was $556.57, with sales tax, but we bought some high-dollar items, and now there are several products that we won’t need to buy for a very long time. My husband still had serious sticker shock.
-Cash or debit only – no credit cards are accepted, except for American Express. This isn’t a problem for us because we keep a cushion in our checking account, but it was a surprise. For people who have trouble managing credit, it’s a good thing, but we were disappointed that we can’t earn cashback bonus points on items we buy there.
-You have to really know your prices. As I’ve already mentioned, some prices are great, some are just OK, and some are outrageous. I updated my price book and took it with me, so I could make sure that everything we bought was, in fact, a good deal. My advice is to not set foot in a Costco warehouse without a calculator and, at minimum, a list of prices for your most frequently purchased items.
-Bulk shopping requires planning and organization. You must store and manage your inventory carefully, and this is easier for some people than others. For those who struggle with organization, bulk shopping can be a money mistake.

So what’s my verdict? For my family, when I consider our hobbies, buying habits, financial picture, and level of organization, I think a Costco membership is worthwhile, at least for now. However, your experience may be different, because every family has different resources, habits, and preferences, and Costco prices vary by region. If you’re considering a Costco membership, I hope the information provided in this post will help you make the right decision for your family.