Is Costco Really Saving You Money? Seven Ways You’re Overspending at the Retail Giant

Sam’s Club, Costco, and BJ’s tout themselves as a means of saving consumers money by offering bulk products at a lower cost. While you can definitely save money there, you should be aware of the so-called money traps.

The goal of any retailer is to get you to spend more, and Costco is no exception. In fact, there are some pretty strategic moves that happen behind the scenes to part you with your hard-earned dollars.

Here are the common ways many people overspend and how to avoid them.

1. Buying Things You Don’t Need

Just because something is a better price at Costco doesn’t mean you need to buy it. Especially if you don’t need it. If you live alone, for example, you don’t really need 20 cans of soup, unless you’re eating one every day of the month.

Think about your purchases, and whether you’d be better off buying a smaller quantity for less at a regular supermarket.

2. Impulse Buying

If you’ve ever stopped at the front of a Costco, you’ll notice some high-end displays waiting to snag innocent buyers who entered with a list. In this respect, the warehouse club knows what it’s doing.

The idea is to make everything look really nice and strategically place items at the front to draw you into spending money you didn’t plan to. Stay focused when you walk into the warehouse and avoid making eye contact with the shiny displays.

3. Buying Protection Plans

We get it. You want to protect that TV or other high-end electronic item you purchased at Costco and safeguard your investment. The problem is many of these protection plans aren’t worth the paper they’re printed on.

It’s important to remember that a protection plan doesn’t safeguard against everything. Often, if something does go wrong, it’s either out of the scope of the plan itself or the protection has expired. This is one area where you can save your money.

4. Assuming Costco Is the Cheapest

Costco does have a lot of great deals, but they aren’t the be-all, end-all. You should definitely make it a point to comparison shop before you head to the warehouse club.

Sometimes, grocery stores have deals that best Costco, or you can get fewer items (great if you’re low on space) for a lower out-of-pocket cost than buying in bulk. This is where making a list of things you need can come in handy because you can compare the fliers and online deals before heading to the store.

5. Buying Brand Names

Whether it’s vodka or over-the-counter medications, buying brand names can lead to spending more. Instead, shop the Costco brand, Kirkland Signature.

You’ll find a comparable quality (on most things) at a significantly lower price that could make or break your budget. If you feel it doesn’t match, the warehouse club’s return policy is very generous.

6. Walking Around the Store

There’s a reason people say to just go into the aisles that have items on your list. If you walk around, you’re more likely to give in to temptation and blow your grocery budget out of the water.

Make your list and stick to it, in order to avoid spending extra cash.

7. Using a Credit Card to Pay

Some credit cards have perks that reward you for grocery shopping and they can be used at Costco. However, if you don’t pay that credit card off at the end of your shopping trip or before the new statement arrives, you’re effectively paying interest on your purchase.

We’re not saying don’t use credit cards, just use them wisely. And, make sure you pay off the grocery balance at the very least.