With prices rising, consumers are increasingly looking for ways to save money. And one way to do that is through warehouse club retail stores, like Sam’s Club, Costco and BJ’s Wholesale Club. But is membership all it’s cracked up to be?
Shopper Britney Downing tells KHOU-11 that she saves on cereal for her five kids. “I can get two bags of cereal here at Sam’s for about six bucks.” Another shopper, Tracy Reese, tells KHOU-11 that she likes to buy in bulk for items like paper towels and toilet paper.
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This comes at a time when consumer confidence is plummeting, with fears over how trade policies and tariffs will impact the cost of living. American consumers have already seen what’s happened with the price of eggs.
That could be why many “are now turning to the club channel for routine household shopping,” according to research from Acosta Group. “They are seeking good value and prices that better fit their budget, with millennials driving most of these increases.”
Compared to a year ago, 21% of respondents are shopping at a warehouse club more often, and 28% say they’re buying grocery and household needs there — not just big-ticket items.
How warehouse clubs work
A warehouse club is still a retail store. But to shop there, you’ll need to become a member first. An annual membership fee typically costs from $60 to $120, which can usually be recouped in savings if you use the membership enough. But there are a few considerations to be aware of before joining.
Warehouse clubs typically offer everything from groceries to electronics to clothing. What sets them apart from traditional retail stores, however, is that they offer these items in bulk at discounted or wholesale pricing. They might also offer discounted services such as travel and insurance, and may have an on-site pharmacy, optical center and/or gas station.
The benefits? You can save on bulk purchases and gain access to deals and discounts. Some stores, like Costco, offer a money-back guarantee if you’re not satisfied with your membership.
The downside? A membership may not be worth it if you don’t shop there frequently enough to offset the savings. There are other issues, too: It can lead to impulse buying, which defeats the purpose of joining a club to save money.
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Things to keep an eye out for
A warehouse club membership isn’t a scam, but not every deal is really a deal. Buying in bulk, for example, isn’t always a bargain. And the selection of big-ticket items like electronics or appliances may be more limited than what you’d find at a specialist retailer.
Many products, from groceries to vitamins, have a shelf-life. So buying in bulk may not save you money if you can’t get through a super-size version of that product before it expires. If you can’t eat 24 oranges before they start to rot, you’re literally throwing those savings in the garbage.
Warehouse clubs are typically designed to get you to shop more and spend more. The layout can be confusing; usually the groceries are at the back — behind all the fun big-ticket items like flat-screen TVs. And free food sample stations tempt you to spend more time in the store.
Warehouse clubs may also employ tactics that lure you into making impulse buys with signage such as ‘limited quantities.’ Many marketers use this ploy, not only warehouse clubs, but it’s good to be aware of it. You don’t want to walk out with a giant flat-screen TV when you just came for groceries.
How to protect your finances
Before joining a club, consider whether you’ll go often enough to justify the membership fee. Do you have enough room to store these bulk items? For perishable items, will you be able to eat everything before it goes to waste? If you’re buying a big-ticket item, are you really getting a deal?
You may find better sale prices on electronics or appliances at retailers who specialize in those products, especially during Black Friday. It’s worth doing a price comparison of big-ticket items against other retailers, such as Walmart, Amazon and Best Buy.
If you do buy a big-ticket item from a warehouse club, be sure to understand the return and refund policy (some product categories may be exempt or have a limited return window).
If you have a membership, avoid shopping traps by making a shopping list before you go. It could be helpful to create a budget to prevent you from overspending. If you’re about to make an impulsive buy on a ‘deal’ — walk away, do the rest of your shopping and come back after you’ve had a moment to think about it.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
