The Lowdown on Costco - Part 2

Today we continue on with the lowdown on Costco. If you missed Part 1, click HERE.

The Cons of Costco

• $100 Rule – As a rule of thumb, it’s very difficult to get out of Costco without spending more than $100. You’ll also have a limited variety of items in your cart for $100 because of the larger quantities. If you were to do all your shopping for the week there, you total could likely be even higher.




• Large Quantities/Limited Variety - I would estimate that we do about 50% of our regular shopping at Costco. We still need to go to a regular grocery store for the items we only use in smaller quantities and for more variety than what’s provided at Costco.




• Coupons/Bags – Costco does not accept manufacturer coupons (but they do send you Costco store coupons occasionally), and they do not provide shopping bags. They usually have a supply of boxes available for free.

What Works for the Diva Family

We limit impulse purchases. Costco makes a lot of money from members who make impulse purchases. Although we love to try the samples, we consider whether it’s something we need before purchasing sample items.

Finally, as I mentioned before, we use a pricebook to compare the Costco prices to other stores. We focus on buying the items that are cheaper per ounce at Costco and pass up the items that are more expensive per ounce. Over time, you’ll begin to recognize a good deal without having to reference a pricebook. For our family, some of the things that are consistently a better deal at Costco are: milk (usually equivalent to Aldi), bread machine yeast, rice, flour, sugar, spices, butter, and cheese.

Our Best Deal: The Diva Boys were recently enamored with a twin sized Lightening McQueen racecar trundle bed on display at Costco. The Costco website price for the bed was $799. In the warehouse, the price for the bed was $499. (Costco Tip: There's a wide selection of items available on costco.com, but the prices tend to be higher than in the warehouse.) Baby D is almost ready for the transition to a "big boy" bed, yet we didn't want to spend an excessive amount of money on a new bed. (As a side note, in true "Deal Diva" fashion, we purchased Junior D's bedroom set on Craigslist in excellent used condition for a fraction of the furniture store cost.) So, on a recent Costco trip, when we spotted the racecar bed marked down to $199, we decided to make the purchase. In talking with the manager, the price had been marked down that morning, and there was only one left. (Another Costco Tip: Items that do get marked down tend to go VERY fast.) In the end, we got a high quality bed for well over half off the regular price.

Now it’s your turn. Are you a member of Costco (or Sam’s Club)? What is your approach to shopping at a warehouse store? What items are the best value for you? Leave a comment or send me an e-mail with your feedback.

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.