People either love or hate Costco.

Those that love Costco enjoy the experience of pushing those oversized carts around the wide aisles, enjoying free samples while being able to buy everything from tires to strawberries to furniture at great prices.

Those who hate Costco complain about the 3-packs of 64oz mayonnaise jars, the annual membership fees, and the tendency to overspend on impulse purchases.

Benefits of Costco

Low Prices

Of course, this is the main draw of Costco. Almost every item in the store is being sold at a great price. They push their suppliers hard to give them the best prices, and they pass on those savings to consumers.

Generous Return Policy

Costco has one of the most generous return policies in retail. For most items, they have a lifetime guarantee, no questions asked. It doesn’t matter if you’ve used the item or eaten half of its contents.

Wide Selection of Products

Costco has an incredible breadth of different products that you can buy. One of their slogans is “Think Costco First,” because you can buy almost anything at Costco.

Great Shopping Experience

It really is a pleasure to shop at Costco. Many people enjoy walking the aisles of Costco, enjoying the free samples while shopping. At certain hours, it’s probably possible to enjoy a small lunch with drinks and dessert through Costco samples.

Drawbacks of Costco

Membership fee

The cost of a Costco membership starts at $60. This is a clever way for Costco to encourage you to buy more stuff. By buying more at Costco, you are more likely to “recover” and “make the most” of your membership fee. They even have a small business program as well as a credit card where you can earn cashback on your Costco purchases, encouraging even more buying.

Giant carts

Costco carts are huge – designed to shop for and purchase large items. It’s well-known that people will eat more if given a larger plate. Costco knows that you will buy more if they give you a bigger shopping cart.

Warehouses may be far away from your house

Costco has increased its number of stores over the past few years, but the nearest Costco may be 20 or 30 miles from your home. You probably pass by 15 or 20 grocery stores on your way to Costco and are guzzling gas on the way there and back.

May not have many specialty items

You can buy anything at Costco, but Costco will typically only offer one brand of each item. You won’t find 25 types of BBQ sauce at Costco. If there’s a specific brand of something you want, you probably won’t be able to find it at Costco.

Things Worth Buying at Costco

Rotisserie Chicken

At $4.99 for a whole rotisserie chicken, you can feed a family of four with plenty of leftovers.

Gas

The gas prices at Costco are the cheapest around, and if you make the trip to Costco, you should fill up your tank before you leave.

Water

The bottled water is so cheap at Costco. Currently priced at $2.99 for a 48-pack of 0.5L bottles, the water flies off the shelves and you see them everywhere now.

Food court, especially the pizza

$9.95 for a Costco pizza is a great value. Not everyone is a fan of the taste of Costco pizza, but I like the combination pizza.

Golf Balls

Costco has become my go-to place for golf balls. At $29.99 for a 24 pack, you get quality, Callaway golf balls for cheaper than you’ll find at the golf store.

Electronics

Costco has very competitive pricing on electronics. In addition, Costco has a very generous return policy (albeit not a lifetime return policy like for other items).

Meats in bulk

If you have a big family. they have a nice selection of meats and seafood at great prices. Just be ready to freeze some of the 10lb pack of chicken thighs.

Eyeglasses / Contact Lenses

Eyeglasses and contact lenses are incredibly cheap at Costco. They are often cheaper than the local eyeglass shop even after vision insurance discounts are applied.

For more great deals, Bogleheads had an awesome thread about the best deals at Costco.

Things Not Worth Buying at Costco

Prepared foods

Prepared foods are delicious. They’re good in a pinch. The problem is that the portion sizes are very large. They also are not cheap. The prices of prepared foods at Costco approach those you would pay for eating fast food.

Jars of mayonnaise

Costco is famous for their ridiculous value-size jars of mayonnaise. Costco is good for the core staples and one-off items, but I would never buy small items at Costco. In fact, I waste so much condiments that when I shop for spices and condiments, I intentionally buy the smallest-size item, even if it costs me more per ounce. I end up throwing away half of it anyway before it expires, so you save money.

Anything not on your shopping list

It is so easy to impulse purchase through Costco. Sometimes it’s a nice jacket or a nice pair of shoes. Other times, you see the great price Costco has on an item, and you look for reasons to purchase the item because it is a “great deal.” If you take this approach to shopping at Costco, it is hard to leave Costco with anything less than a $100 shopping bill.

Anything you ate as a free sample

I love the free samples at Costco. If you go at the right time, the aisles are filled with samples. The problem with the free samples is that it’s very easy to impulse purchase items that tasted good as samples. And unfortunately, with the items in bulk, a few purchases from the free samples can add up quickly.

One rule of thumb to combat impulse purchases is to never buy anything you tasted as a free sample. Go home and come back to Costco in a week. If you still want the item, then go ahead and buy it.

A lot of items from the coupon book

If you fall into the trap of getting items because they’re offering a few dollars off, you’ll end up with 48 packs of Clif bars and 12 packets of oversalted instant brown rice and quinoa mix that you really shouldn’t and wouldn’t have bought. Not that I’m speaking from experience or anything.

Conclusion

The common theme between the two lists is that planned purchases are almost a great deal at Costco, while unplanned purchases are not. If you go into Costco with a shopping list and stick to that list, you’ll save a lot of money shopping at Costco. If you go to Costco and browse the aisles and grab things that look nice or were a good free sample or look like a “great deal”, then you’ll find yourself spending hundreds more on a trip Costco than you expected.

What do you think? Do you have a Costco membership? What are your favorite deals? Have you ever spent way more than you planned on a Costco trip?

10 COMMENTS

  1. I joined costco when I bought my new house. Since then I have purchased:

    Patio furniture- couches and dining set
    Two sun umbrellas
    A Samsung HD TV (curved- what is up with this curved stuff)
    A vacuum- I once returned a Roomba when it broke. They gave me a full refund and I turned around and bought a new Roomba on sale. I made $50 on the deal. Nuts!
    Lots of booze- the Kirkland Wine is actually better than you may expect and you can find some really good whiskey at times.

    I have also returned:
    A large sun umbrella (believe me, smaller is better and preferably on wheels).
    A bean bag
    A vacuum

    Of note, they will take everything back. It is pretty amazing.

    I like Costco but our’s is the 2nd busiest in the country (that is what one of my patients who works there told me) and it is kind of a pain to get to despite being 10 minutes away. So come February I may be cancelling my membership. If my wife suddenly finds a way to start going more, then we will reconsider.

    Nice post.

  2. We are big fans of Costco for Groceries. We shop mostly their selection of organic fruits and vegetables and make a trip every week. Its much cheaper than Whole Foods for organics but I think anywhere is cheaper than Whole Foods.

    I will say if you are someone who needs a different meal each night it might not work for you. We normally pick a theme for the week and use the same ingredients in all the meals so that we don’t waste anything.

    Even then, our grocery budget is nothing to be proud of.

  3. I used to be a member at Costco. However, ever time I went there I somehow spent around $300. I cancelled my membership and now I don’t spend anything at Costco. Problem solved.

    Warehouse membership clubs, dining clubs, and rewards credit cards all promote the same problem – higher spending. Ultimately, the goal is to spend LESS, not MORE.

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