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.

The PROS:
-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.

The CONS:
-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.

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  13 Responses to “Costco – The Pros and Cons”

  1. Thanks for your info! Too bad we don’t have a Costco out here, but we do have a Sam’s Club. I had considered looking into it – perhaps I will try again soon.
    As far as money-savers go, here’s one for you: Google “The Keeper”. I bought one of those about 10 years ago and it paid for itself within 6 months. Also very environmentally friendly! 🙂

  2. The Costco here isn’t near my usual route, so we have a Sam’s membership. I was talked into the upgrade (coupons, extended hours), but did not continue with it. (although I loved the early store hours!!!) As a couple, no kids, its almost not worth it anymore. I make my own laundry soap and use vinegar as a rinse, which was the big purchase there. The husband isn’t for dropping the membership. I think he likes the variety.

  3. We don’t have Costco around here, but we do have Sam’s. I have a business membership via my Dad’s business, which is only $35 to renew (we take turns paying that). I need to sit down and figure what we actually save, I’m guessing it does work out. I can buy cheese, cat litter, cat food, sugar, choco chips, choco powder, real vanilla and a few other things much cheaper there. I don’t buy much produce though, because we’d never eat it fast enough.

    I think this really varies place to place. We don’t have many options for grocery stores, so it makes Sam’s competitive. But it wasn’t so great out in Los Angeles where we had options all over the place.

  4. I love their return policy. I have return things 2 years later because I was unsatisfied and they took it back. No receipt needed because they have the record of your purchases on your membership. I have an American Express through Costco, so we use that to get rewards (there and elsewhere) and there is no annual fee for it. Overall, we’ve really liked having a membership, especially when we used to live only a mile away from it.

  5. Allergy meds are REALLy cheap there. We also get their wipes, quinoa, olive oil, and a rotisserie chicken or two to shred and freeze. I also like their organic pjs for kids. I agree with everything else you said!

  6. We have a membership with Costco that we purchased a few months ago and we did get the American Express so we could get rewards at the end of the year. I always pay the balance off each month (you don’t have to ) because this card has a 25% APR…ridiculous!!! Now that our family is getting smaller (one son on his own and another one almost never here) we will not renew our membership. Mary Anne is such a picky eater and the bulk purchase sometimes goes bad because Jack and I just can’t finish something ourselves. I do like the idea of purchasing things if you are having a large crowd…although that is only a few times a year for us.
    Jack and I watched an hour show about Costco and it said that they purposely have a limited selection because it is too confusing to the consumer if there are too many things to pick from…I’m not sure if I agree with that. Let us know how you like the Kirkland Free and Clear laundry detergent Heather…I haven’t tried it, but I’m curious 🙂

  7. Hi Heather – Just FYI, if you purchased the next level membership up (its $100 here), you do earn money back. At the end of your membership year they send you a refund check for the 2% back. Like you, as our family has grown that increased price membership became worth it. When the kids were little it would have been a waste. Now, with pricier purchases like the printer ink that you mentioned, the membership nearly pays for itself.
    Also, most of my purchases there are NOT food related. Unless we’re having a party, we often still can’t each all of a huge produce purchase before it goes bad (and I have teenagers!)
    Finally, to echo what some folks said below, I don’t see Costco as my “swing by and pick up X, Y and Z store.” I try to only get there once or twice a month unless something special pops up b/c it is very large to navigate.
    Hope you enjoy the savings!
    Kim

  8. We don’t have a Costco near us but we have a Sam’s club. I have started shopping more there in the last few months. My biggest suggestion is just to compare items. Some items I have found are cheaper but not everything. We are a family of 5 and I have to be careful that what I get can be used up before it goes bad. We buy all our bottled water, Gatorade(for sports kids) there. I also buy some meat there as long as I can split it up into smaller portions.

  9. Thank you for the summary on Costco. We do not have one here, although I wish we did so we could compare it to Sam’s Club. We had not had a membership in awhile and I finally got one last October, primarily because they have the best picture printing in town. I prefer matte finish pictures and only Sam’s and Walmart had matte finish, and Sam’s quality was much better. Would you believe that *before* Christmas I got a letter saying they were discontinuing their printing service? I was so annoyed. That being said, I have only found a few things there that are cheaper. I always buy the McCormick’s vanilla, mozzarella string cheese (long expiration date) and maple syrup there. I also usually get cans of mandarin oranges. This the only canned fruit my kids like and I swear they would eat 4 cans a day if I let them. LOL! It’s not a lot cheaper than Walmart, but it is a bit. Last time I was there I bought a 12 pack of Schick Intuition refills. I usually get them very cheap with coupons, but I hadn’t recently, so I picked them up there. They *were* a lot cheaper than the normal price everything else.

  10. We shop Sam’s club but we split the membership with my parents. You should see if cosco will let you have two people on the account like Sam’s.

  11. Thanks! This is super helpful! I just got married and my husband and I were debating going this route. After reading this I think our answer is no. I have never been in a Costco but have heard great things. In my mind it was something very different. This description puts it in a perspective I can appreciate. It isn’t what I had imagined at all! Glad I read this!

  12. I found this blog looking online, trying to find out how I could get an expiration date on a jar of mandarin orange slices.

    We have a small family of three. While we usually spend hundreds of dollars each trip, though usually go only once a month or less, I would say we’ve saved thousands of dollars over the year, as we do buy other things than food there. There is always peace of mind, that they will take almost anything back at any time, which I have. I once brought back a coffee maker with grinder that wasn’t performing and I had had it for over four years! I used the money toward another model, that Costco didn’t carry, so I can’t complain about that.

    Many of the points the author wrote in her initial blog are true, such as food waste, which does happen sometime in our household. But, we have the Executive membership and the return we get on that is always more than the cost of the membership. We don’t make all of our big purchases at Costco, due to limited offerings, but enough to make it worth our while.

    We also have. Sam’s Club, which my mother-in-law likes, because she thinks it’s cheaper.
    Depending on what you buy or the products you like, that could be true. But, for us, Costco has better quality items and the prices do not seem higher then Sam’s, especially when you factor in quality and their return policy. We also made some decent clothing purchases there. You just need to look.

    The main reason we don’t like Sam’s Club, is because they are owned by the Walton family, who owns Walmart. Walmart treats their employees so poorly, preying on the lowest and least advantaged level of our society. Just watch a documentary about that! Costco on the other hand, treats their employees very well and pays the highest wage in the retail industry. Most all the workers are very helpful. However, slackers don’t seem to last long and rightfully so. What is sewn is what is reaped.

    The only concern I have regarding Costco, right now, is the salmon issue, that everyone is debating about. Also, I did notice my jarred oranges are from China, which makes me sick to think about. Yes, we all know Mandarin is Chinese based. But, certainly we grow Mandarin oranges in the USA too, especially in California, known for its widely grown produce of all kinds, citrus being a major crop. The USA should not be importing food from any third world country, especially China, known for cheap goods and low regulations of all kinds.

    All in all, Costco is the best in most respects and well worth a membership for most anyone, with disposable income at most levels.

  13. Thanks for the tips. I have been balking about whether or not to reinstate my membership for 3 years or so, since my sons moved out and there’s not much need for large packages any longer. I tended to think ‘big’ portions when going there, as was dating a big guy – now I’m trying harder to watch my weight again. I live in North TX and the local Costco is getting more and more crowded due to our population explosion; there’s a line for gas often and no covered parking plus the heat is bad in summer to walk across huge parking lots. Down the highway, I knew I’d never go back to Sam’s because they made a major mistake adding my credit account (which they encouraged to save money with an account when buying a computer) to some woman’s in Dallas that I don’t even know. Nine times I went back to the store and/or called management and no one could separate her name from mine!
    Costco indeed has higher business standards. However I wasn’t sure the only reason I should get a membership was for Tollhouse chocolate chips for scratch baking! I was told there’s a $1K discount on new car purchases (I’m not convinced that it was a no-hassel cost saving when I did buy a car). Also my favorite glasses I bought there have thin frames, and in 2010 and 2014 I’ve had an earpiece suddenly break off- to get new pairs I must get another membership!!! I would have thought the manufacturer would repair but it goes through Kirkland and you must buy new. The cost savings of an average new pair is still debateable in my mind, so my reseach goes on…

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