In the grand scheme of your yearly expenses, a Costco membership may not be such a huge one. At just $60 a year for a basic membership or $120 a year for an Executive membership, you're probably spending a lot more on utility bills, car payments, and your mortgage than you are for Costco access.
But still, money is money. And you don't want to throw yours away on a Costco membership for no good reason. With that in mind, here are some pros and cons of becoming a Costco member.
Pro No. 1: You can save big on groceries and household essentials
Costco's bulk offerings make it easy to save money on food and household supplies on a per-ounce or per-unit basis. Take ibuprofen, a common pain reliever people like to keep on hand. Costco's online price for 1,000 tablets has you paying $0.01 per pill for the Kirkland version, which is Costco's signature brand. Even a large bottle of Amazon's generic version has you paying double at $0.02 per pill.
Pro No. 2: You can gas up your car for less
If you live in the suburbs or have a long commute, gas may be a larger expense in your budget. But you might save a lot of money on it by filling up your car at Costco, since the warehouse club giant often has the cheapest fuel prices in town. Plus, that way, you get to accomplish two errands with a single trip.
Pro No. 3: You can enjoy savings on vacation packages
Traveling can be expensive, but you might enjoy nice savings by booking a cruise or resort stay through Costco. Many of Costco's deals are exclusive to store members and offer added perks like resort credits that are redeemable for activities and drinks.
Pro No. 4: You can return most items at any time
Costco has one of the most generous and flexible return policies among retailers. With limited exceptions, you can bring almost any item back at any time for a full refund, and for a variety of reasons.
In the context of clothes, you can return apparel on the basis of it not fitting well. For food, you can bring back partially eaten items if you don't like them. Best of all, you don't have to show a receipt to get your money back, since Costco representatives can look up your purchases based on your membership ID.
Con No. 1: Bulk buying could increase your chances of waste
While buying groceries and household items from Costco could result in big savings, there's also the risk of letting food or other products go to waste if you're not able to use them before they expire.
We talked about pain medication in the example above. You might spend a lot less on ibuprofen at Costco than another store. But 1,000 tablets is a lot of medication. You may not end up finishing the whole bottle before it loses its potency (which would actually be a good thing, as it would mean you didn't spend half the year in pain, but still).
Con No. 2: You may be tempted by impulse buys
Costco's inventory is massive. Because of this, you may be tempted by impulse purchases when you shop in stores. And in that case, the savings you reap on bulk purchases could be negated via the extra items you end up bringing home.
Con No. 3: You may not shop there enough to recoup your membership fee
Some people shop at Costco on a weekly basis. But if your intent is to only go a few times a year, then you may not end up saving enough on your purchases to come out ahead financially after accounting for the cost of a membership. If you go to Costco three times a year, you'll need to make sure you're saving $20 each time just to break even on the basic membership fee.
Con No. 4: What you save on gas at Costco, you might spend by driving a longer distance to get there
Costco's affordable gas prices are a big draw for a lot of people. But if you don't have a Costco all that close to your home, what you gain in the form of a lower price per gallon, you might lose by wasting gas to get to a station. For example, you might save $0.10 per gallon on a 15-gallon fill-up, putting $1.50 back in your pocket. But if you spend $2 in gas to get to Costco in the first place, you won't be doing yourself any favors if the sole purpose of your trip is to buy gas.
Clearly, a Costco membership could be a mixed bag, so think carefully before signing up. But also remember that Costco guarantees your satisfaction as a customer. So if you find that your membership isn't working out, you can always cancel for a refund. That makes joining a pretty low-risk proposition.
