Friday, March 13, 2009

The Lowdown on Costco - Part 1

Today we begin a new series on Costco. Over the next two posts, I'll share tips and tricks for shopping Costco. I'll also talk about the pros and cons of the store. Finally, I'll explain why the Diva family loves Costco and share with you our best deal ever - one that saved us several hundred dollars!

The Pros of Costco

  • No Hassle Returns – If you have a food item that goes bad too quickly or you do not like for any reason, Costco will return it with no questions asked. I have returned a few items over the past year and have not had any issues. Clothing can be returned as well, since you can not try it on at the store before purchasing.

  • Electronics – Costco offers a free customer support phone number for electronics questions or troubleshooting. They also provide a 90 day return period if you are not satisfied with the product.

  • 2% Rebate – At Costco, you can choose from a standard membership for an annual fee of $50, or an executive membership for $100. Executive members receive a 2% rebate each year on their purchases (excluding gas and a few other items). If you do not spend enough in the store in a year to earn a rebate of $50 of more ($2500/yr), then Costco will give you back the difference up to $50 by simply inquiring at the membership desk. For instance, with an executive membership, if I spend $1500 at Costco in a year, I would receive a $30 rebate, making my net membership cost $70. In this scenario, I could request the additional $20 back that I paid above the standard membership cost of $50. So it’s a no-lose situation. In our first year, we opted for the executive membership, and then ended up buying a computer there, in addition to our regular grocery purchases, and we received a rebate back of $62, thus netting our membership fee at $38 for the year.

  • Quality Produce – We’ve been very pleased by the quality produce we’ve found at Costco. Buying in bulk directly from their suppliers helps ensure quality produce at a low cost. We try to buy what’s in season to get the best value on produce, as some out-of-season items can be costly, especially when purchasing a warehouse-sized quantity.

  • Low Prices – To ensure you are getting a good value for your money at a warehouse club, it’s very important that you consider the per ounce cost of the items. I keep a pricebook with the common items our family buys on a regular basis, and I can determine whether certain items are a better value at a warehouse store, a discount grocer (like Aldis), or my regular grocery store. Whenever you consider an item at Costco, you also must consider whether you need a large quantity of the item. If you won’t use it all up before it goes bad, then the cost per ounce savings goes out the window.

  • Abundant Samples – Our family loves to try before we buy. This is particularly true for items in larger quantities. Who wants to be stuck with a $10 jar of salsa that nobody in the family will eat?

  • Entertainment Value – A trip to Costco is always an entertaining experience for the family. Between the samples, the crowd, and the interesting, ever-changing selection of limited purchase items, there’s always something new to see or try there, and the kids are easily occupied throughout our shopping trip.

  • Additional Services – As an added bonus, warehouse clubs offer services to help their members save money on a variety of things – gas stations, cell-phones, pharmacy, vision centers, photos centers, auto and home financing, vacation packages. To this point, the only service we have used is the Costco gas station. We don’t go out of our way to get gas there every time, but when we are heading to Costco to shop, we always fill up. Their gas prices save us an average of 5 cents a gallon.

Up Next: In Part 2, I’ll talk about the downsides of shopping at Costco, and then will share with you why we love Costco and what works for the Diva family.


Ginger said...

I find that their vision center is the absolute cheapest around. I was told, "We only mark up 18% throughout the store. This is why we can beat everyone on prices."

I purchased a new membership and two pair of frames. Lenses were high index, progressive lenses with prisms. One pair were transition and the other outright sunglasses.

Grand total inc. mbrshp = $525.00

ONE pair of glasses at Walmart and Sams were $495.00!!!!

If I never step foot in the door again, I got my money's worth out of the membership.

I do happen to love their seafood, bread and bagels. :)

The Deal Diva said...

Hey Ginger ~ Thanks for the tip on the Costco vision center. You're timing was great! Junior D needs his first pair of glasses, and after reading your comment, and doing a little online research, I decided to take him to Costco to look at glasses. We got two pair for a total of $138!!! That's less than I would have paid for one set of frames at an optical store. (Of course, I checked Target Optical, too...a store that's near and dear to both of our hearts, right?!)

Thanks for the tip!