Is Costco membership worth it?

[HBFIRE]

These costco threads come up every now and then on various personal finance forums.  Basically it comes down to the same answer every time -- the value totally depends on your specific situation and usage.  There is no one size fits all answer.

[knot12gossip]

I'm in California the saving on gas alone is enough to justify the membership fee.

Sent from my Moto Z (2) using Tapatalk

[nereo]

Unless I missed it, I'm shocked that no one has linked MMM's blog post on the matter:

https://www.mrmoneymustache.com/2011/09/30/is-a-costco-membership-worth-the-cost/

[OtherJen]

Unless I missed it, I'm shocked that no one has linked MMM's blog post on the matter:

https://www.mrmoneymustache.com/2011/09/30/is-a-costco-membership-worth-the-cost/

I did, early in the thread (in response to someone who claimed that we'd all lost our frugal bearings).

[nereo]

Unless I missed it, I'm shocked that no one has linked MMM's blog post on the matter:

https://www.mrmoneymustache.com/2011/09/30/is-a-costco-membership-worth-the-cost/

I did, early in the thread (in response to someone who claimed that we'd all lost our frugal bearings).

My apologies -- I did miss that post. :-)

[kite]

I didn't find a membership worth it for our household because went through the exercise of creating a price book.  The proof is on paper that quality & prices comparable to Costco can be found in our other local markets.  Your mileage may vary, but if you don't undertake the effort to craft a pricebook for the things your household consumes, you cannot really know if it makes the best financial sense.
In addition, I'm philosophically opposed to buying in bulk.  Why? 
Natural disasters.  Guess what happens to all the stuff we bought in bulk when the power goes out?  Everything perishable perishes. We don't buy beyond what we could reasonably eat before spoilage in the event we lose power as we did in the wake of Hurricane Sandy.   Floods & tornadoes ruin everything.  And those are the moments when you realize the pointlessness of everything taking up physical space in your home.  You'd really rather have access to cash.   
Pre-buying non-perishable things takes your money out of the [index] market where the money might grow and exposes it to unnecessary risk.  You are betting that the goods won't get lost or destroyed and that the price will go up.  We mustachians don't encourage each other to do that with individual stocks.  No.  We say "index funds" like it's a mantra.  Why do it with any grocery or dry good stockpile of boxes or cans?  You likely wouldn't take your savings out to buy a car today that you won't use until 10 months from now.  Why do that with toothpaste, toilet paper, canned tomatoes, printer paper or socks?  We humans get lured in with the promise of once-in-a-lifetime deals on some item, but the pricebook exercise proved how prices are cyclical and the never-gonna-happen-again sale on everything will most certainly happen again. 
Plenty of people love the samples.  They enjoy buying from Costco and their household is such that a monthly run to Costco makes some sense for their lifestyles.  God Bless 'em.  I'm not judging and they've got no reason to justify anything to me.

No stockpiling because your electricity might go out long enough to spoil food? How often does that happen in the US to the average person? Once every 10 years? My whole life I can only recall one time where the electricity was out for 2 weeks because of an ice storm and our house was basically the last on the list to be restored. Hurricanes, tornados, even during disasters my power is usually only out a day or two. Not nearly enough time to spoil even 20% of the food. I remember living in Africa where power outages were an every other day occurrence. Food spoilage is a silly thing to worry about to keep you from saving money.

Assuming you save 10% at costco, and even granting that 2 weeks worth of food spoil each year (or 4% of your annual food), you'll still come out waaaay ahead. VTSAX is one thing, but saving 10% on your bills beats the S&P, and you should make that choice every time.

That's some wild speculation about saving 10%.  Groceries are run on very thin margins; if Costco was consistently priced 10% better than everywhere else, the others would already have folded.  Also, the cost to purchase and run a freezer is not nothing.  The average American family tosses out about $2800 in spoiled food each year.  The buy-in-bulk mindset encourages overbuying which means overeating and also means more stuff in the drawers of the fridge that will rot before they can be eaten.
MMM mentioned in one blog post the notion of storing your stuff on Craigslist.  If you don't need it now, don't pay to store it.  Just get rid of it and trust that it will be there on Craigslist when you need it.  Using that same philosophy, I store ground beef and chicken legs at Aldi & ShopRite. 

[nereo]

I saved more than 10% compared to all other store options near me. we price check basically everything.  Again, it depends on what you buy. The point of not over-buying (or buying junk you otherwise wouldn’t) is a good one, but for us we were able to meal plan more effectively after Costco runs

Tl;dr - whether it’s worth it depends on what you buy And how often.

[parkerk]

In Canada non-members can shop using a Costco gift card.  A member has to buy you the gift card but then you can use it without a membership, and if you go over the value of the card you can pay the difference with cash.  I think you're supposed to sign up for a free one-day pass at the membership counter but I don't know how heavily they enforce that.  In any event, does anyone know if it works the same in the US?  The Costco US website is surprisingly unhelpful, but the Canada one specifically says non-members can use it.

[FIPurpose]

I don't run any extra freezer space. Costco is like 90% dry goods. Yep Costco seems to be about 10% cheaper on the whole. For a few other items that don't make sense for bulk purchase, I shop at Winco for.

Adam's peanut butter is right around 10% cheaper ($8/ year savings)
Premium coffee is about 20% cheaper. ($50/ year savings)
Butter is about 10-20% cheaper
Cheese is usually cheaper

They run good deals on certain electronics.

You should look at any prescriptions you buy, costco can sometimes run amazing deals.

Think about removing your eye insurance and just buying eye exams straight from Costco. That can often be cheaper. (Exam + glasses are like $150, compare that to annual premiums that are usually around $200).

But I also live on the West Coast. Costco seems to have better relative pricing at higher cost of living areas.

[LiveLean]

Family of four, two teenagers, we live 10 minutes from a Costco.

We do probably 90 percent of our total shopping at Costco. Rarely go to a grocery store. Most of our furniture, electronics, and household items (dishes, rugs, towels, lamps, batteries, electric toothbrushes, countless other things) has come from Costco. Heck, much of my wardrobe, too. The bargains they have on things from roses (24 for $15.99) to Adidas shoes ($20-$30 range) to sheet cakes ($14 to feed 40) are amazing. Costco is the No.1 seller of wine and No.3 bookseller in the USA, which tells you a lot about their demographic.

Costco's customer service and the way they treat their employees is legendary. I bought a new MacBook Air for $949 earlier this year and didn't realize they later discounted it further. I got a letter in the mail with a $100 Costco card. What other company does that?

They have a generous return policy and even though Wall Street and the mainstream media hate Costco, its stock continues to soar. One of my best investments I've ever made. Wish I had bought more back in 2006. It is worth 6x.

As for the membership charge, really? Buy the executive membership for $110 with 2 percent back. You'll come out ahead. Don't even think of comparing it to Sam's. Costco is one of America's best companies for all the of the reasons above and more. Sam's is freakin' Wall-Mart with a cover charge.

[mm1970]

Family of four, two teenagers, we live 10 minutes from a Costco.

We do probably 90 percent of our total shopping at Costco. Rarely go to a grocery store. Most of our furniture, electronics, and household items (dishes, rugs, towels, lamps, batteries, electric toothbrushes, countless other things) has come from Costco. Heck, much of my wardrobe, too. The bargains they have on things from roses (24 for $15.99) to Adidas shoes ($20-$30 range) to sheet cakes ($14 to feed 40) are amazing. Costco is the No.1 seller of wine and No.3 bookseller in the USA, which tells you a lot about their demographic.

Costco's customer service and the way they treat their employees is legendary. I bought a new MacBook Air for $949 earlier this year and didn't realize they later discounted it further. I got a letter in the mail with a $100 Costco card. What other company does that?

They have a generous return policy and even though Wall Street and the mainstream media hate Costco, its stock continues to soar. One of my best investments I've ever made. Wish I had bought more back in 2006. It is worth 6x.

As for the membership charge, really? Buy the executive membership for $110 with 2 percent back. You'll come out ahead. Don't even think of comparing it to Sam's. Costco is one of America's best companies for all the of the reasons above and more. Sam's is freakin' Wall-Mart with a cover charge.

We save money at Costco too, but I have found that the Executive membership, two years in a row, has not paid for itself.  Regular membership $60, Exec $120, our cashback awards were $51 this year and I think $59 last year.  Almost, not quite. 

[HPstache]

Family of four, two teenagers, we live 10 minutes from a Costco.

We do probably 90 percent of our total shopping at Costco. Rarely go to a grocery store. Most of our furniture, electronics, and household items (dishes, rugs, towels, lamps, batteries, electric toothbrushes, countless other things) has come from Costco. Heck, much of my wardrobe, too. The bargains they have on things from roses (24 for $15.99) to Adidas shoes ($20-$30 range) to sheet cakes ($14 to feed 40) are amazing. Costco is the No.1 seller of wine and No.3 bookseller in the USA, which tells you a lot about their demographic.

Costco's customer service and the way they treat their employees is legendary. I bought a new MacBook Air for $949 earlier this year and didn't realize they later discounted it further. I got a letter in the mail with a $100 Costco card. What other company does that?

They have a generous return policy and even though Wall Street and the mainstream media hate Costco, its stock continues to soar. One of my best investments I've ever made. Wish I had bought more back in 2006. It is worth 6x.

As for the membership charge, really? Buy the executive membership for $110 with 2 percent back. You'll come out ahead. Don't even think of comparing it to Sam's. Costco is one of America's best companies for all the of the reasons above and more. Sam's is freakin' Wall-Mart with a cover charge.

We save money at Costco too, but I have found that the Executive membership, two years in a row, has not paid for itself.  Regular membership $60, Exec $120, our cashback awards were $51 this year and I think $59 last year.  Almost, not quite.

You can ask them for a refund on the difference and they will give it to you.  Or at least that's what they told me before going executive.

[HBFIRE]

We save money at Costco too, but I have found that the Executive membership, two years in a row, has not paid for itself.  Regular membership $60, Exec $120, our cashback awards were $51 this year and I think $59 last year.  Almost, not quite.

Hit or miss for us as well, but there are years we spend substantially more when we buy some big ticket items there (i.e. appliances or electronics) which tends to make up for any small differences.  That said, I review it each year to make sure we want to keep it.

[seattlecyclone]

As for the membership charge, really? Buy the executive membership for $110 with 2 percent back. You'll come out ahead.

This is far from a universal truth. We have had a Costco membership for several years and find it worthwhile, but have never once met the $3,000 annual spend that you need to break even on the executive membership. Our shopping pattern is different from yours though. We don't do "90% of our total shopping" there. At ten miles from the nearest Costco store, we're not going to go there for every little thing. I go once every two or three months and fill my trunk with mostly non-perishables. The savings is totally worth it for those things, but the quantities and prices for produce and dairy at the local store meet our needs better than driving to Costco every week for giant packages of these things would.

[OtherJen]

Family of four, two teenagers, we live 10 minutes from a Costco.

We do probably 90 percent of our total shopping at Costco. Rarely go to a grocery store. Most of our furniture, electronics, and household items (dishes, rugs, towels, lamps, batteries, electric toothbrushes, countless other things) has come from Costco. Heck, much of my wardrobe, too. The bargains they have on things from roses (24 for $15.99) to Adidas shoes ($20-$30 range) to sheet cakes ($14 to feed 40) are amazing. Costco is the No.1 seller of wine and No.3 bookseller in the USA, which tells you a lot about their demographic.

Costco's customer service and the way they treat their employees is legendary. I bought a new MacBook Air for $949 earlier this year and didn't realize they later discounted it further. I got a letter in the mail with a $100 Costco card. What other company does that?

They have a generous return policy and even though Wall Street and the mainstream media hate Costco, its stock continues to soar. One of my best investments I've ever made. Wish I had bought more back in 2006. It is worth 6x.

As for the membership charge, really? Buy the executive membership for $110 with 2 percent back. You'll come out ahead. Don't even think of comparing it to Sam's. Costco is one of America's best companies for all the of the reasons above and more. Sam's is freakin' Wall-Mart with a cover charge.

We save money at Costco too, but I have found that the Executive membership, two years in a row, has not paid for itself.  Regular membership $60, Exec $120, our cashback awards were $51 this year and I think $59 last year.  Almost, not quite.

You can ask them for a refund on the difference and they will give it to you.  Or at least that's what they told me before going executive.

This is true. I was convinced to try the executive membership and ended up getting a refund on the difference.

[Nightwatchman9270]

The link to the MMM blog was interesting.  I guess it comes down to how important things like "organic eggs" are to a person.  I buy eggs at Aldi for .66-.79 per dozen.  As a family we rarely get red meat.  Same with Wild salmon.  I still question the value of shopping at Costco because of the great prices on TVs, shoes, shirts, electronics, sheet cakes, etc.  If you are buying stuff like that on a regular basis, you're doing it wrong.  Again, I guess it's funny there will be great discussions on saving $200-300 a year (at best) commuting by bicycle but these same folks think nothing of dropping that same amount or more on fancy coffee, etc. 

[nereo]

The link to the MMM blog was interesting.  I guess it comes down to how important things like "organic eggs" are to a person.  I buy eggs at Aldi for .66-.79 per dozen.  As a family we rarely get red meat.  Same with Wild salmon.  I still question the value of shopping at Costco because of the great prices on TVs, shoes, shirts, electronics, sheet cakes, etc.  If you are buying stuff like that on a regular basis, you're doing it wrong.  Again, I guess it's funny there will be great discussions on saving $200-300 a year (at best) commuting by bicycle but these same folks think nothing of dropping that same amount or more on fancy coffee, etc.

I'm guessing you haven't read very much of what Pete has wrote - or others on this forum for this matter. 
Pete proudly talks about how his diet consists of higher-line food items - almonds, cheese, produce, fancy coffee etc. Likewise, if you think forum is about extreme frugality you are missing the point. 

The median cost of car ownership in the US now over $9,000 per vehicle.  So cycling around doesn't save "$200-300 a year (at best)".  It can easily save $500 per month, and still allow you to own a nice vehicle for less frequent trips.  That's not counting the substantial health benefits of simply using your own power over a mechanized clown-car for short trips.

[OtherJen]

This raincoat was on sale at my local Costco for $9.97 today. I’ve been looking for a decent raincoat for a while, and this one feels solid and fits well. Between this jacket, husband’s coat last winter, and the savings on allergy meds, the membership has been repaid for a couple of years at least. While I was there, I made sure to grab a $5 rotisserie chicken (meat for 2–3 meals plus enough stock for Thanksgiving dinner), a $5 2-lb. block of sharp cheddar, a $10 pack of 4 pairs of Pendleton wool-blend socks, and a few $7 bottles of Kirkland wine for the holidays.

[mm1970]

The link to the MMM blog was interesting.  I guess it comes down to how important things like "organic eggs" are to a person.  I buy eggs at Aldi for .66-.79 per dozen.  As a family we rarely get red meat.  Same with Wild salmon.  I still question the value of shopping at Costco because of the great prices on TVs, shoes, shirts, electronics, sheet cakes, etc.  If you are buying stuff like that on a regular basis, you're doing it wrong.  Again, I guess it's funny there will be great discussions on saving $200-300 a year (at best) commuting by bicycle but these same folks think nothing of dropping that same amount or more on fancy coffee, etc.

I'm guessing you haven't read very much of what Pete has wrote - or others on this forum for this matter. 
Pete proudly talks about how his diet consists of higher-line food items - almonds, cheese, produce, fancy coffee etc. Likewise, if you think forum is about extreme frugality you are missing the point. 

The median cost of car ownership in the US now over $9,000 per vehicle.  So cycling around doesn't save "$200-300 a year (at best)".  It can easily save $500 per month, and still allow you to own a nice vehicle for less frequent trips.  That's not counting the substantial health benefits of simply using your own power over a mechanized clown-car for short trips.

Yup.  I eat cheese, drink coffee (not fancy), eat wild salmon occasionally, eat a lot of nuts - mostly because I aim to eat a relatively healthy diet, and Costco has (by far), the best prices on these items.  I don't eat much in the way of carbs like beans & rice (only 2-3 servings a day) because I cannot maintain my weight that way.  I pay a bit extra for local CSA vegetables because I don't really give a rat's ass if I can feed my family for $200 a month shopping at sprouts and the 99 cent store.  The stuff I get from the CSAs are better.

Also, I don't cycle anymore.  We talk about it, but it's just really hard with our current schedules.  However, when we were cycling 2x a week, we were saving 40 miles of driving a week.  Sure that's only about $300 in GAS but it's a lot more in wear and tear in car costs.  If you think that we paid $18,000 for a car and let's say we are going to drive it 160,000 miles before we sell it for $2000...then what you have is $16,000 auto cost for 160,000 miles.  That's 10 cents per mile, or an additional $200 per year.  Plus maintenance, and that's $600.  It would be a lot more if you just...didn't have a car, of course.  Then you save insurance also.

[maisymouser]

Not for us, but that may be due to our A) location, B) alternatives, C) purchasing selections, and D) dumpster diving habits (any other divers out there?!?).

A) We live about 15 minutes driving distance from the nearest Costco, and it is not close to other places we frequent. We are pretty conscientious about not spending our time shopping, let alone driving extra to do shopping.

B) I haven't found much of anything at Costco that isn't as cheap at Aldi. Plus, Aldi is more convenient for us as my husband passes one 1x/week. And it comes without the obnoxious daily email spam, consumer habit tracking, unnecessary electronics, .... Anyway, I'd rather support Aldi and the pricing on the things we actually buy is comparable. Which brings me to...

C) Purchasing selections. We don't buy much of anything other than regular groceries. I drive an electric hybrid (when I'm not biking to work and back) and rarely need to spend money on gas. We never, ever buy shampoo or most other household 'consumables' because we are frequent...

D) DUMPSTER DIVERS! We do shop at Aldi for groceries but pick up the majority of our food, carpets, shampoo, laundry detergent etc from dumpsters. ESPECIALLY during the end of the school year when the local ritzy colleges let out and students are throwing out literally family packs of cereal and tide pods. It is a mega win since we don't spend money, have fun, and save the environment. Oh, and we sell used carpets on the side from dumpster diving throughout the year since that is a common throw-out item by the students. We regularly can discarded tomatoes, dehydrate bananas, etc from this and usually have fresh (seriously) produce each week that gets tossed for very minor blemishes, most of the time none at all. It's equal parts exciting and depressing.

All this to say that buying my Costco membership this year has turned out to be quite a disappointment. I'm going to return it since they do have an excellent return policy and will refund my membership since I'm dissatisfied.

[slappy]

Not for us, but that may be due to our A) location, B) alternatives, C) purchasing selections, and D) dumpster diving habits (any other divers out there?!?).

A) We live about 15 minutes driving distance from the nearest Costco, and it is not close to other places we frequent. We are pretty conscientious about not spending our time shopping, let alone driving extra to do shopping.

B) I haven't found much of anything at Costco that isn't as cheap at Aldi. Plus, Aldi is more convenient for us as my husband passes one 1x/week. And it comes without the obnoxious daily email spam, consumer habit tracking, unnecessary electronics, .... Anyway, I'd rather support Aldi and the pricing on the things we actually buy is comparable. Which brings me to...

C) Purchasing selections. We don't buy much of anything other than regular groceries. I drive an electric hybrid (when I'm not biking to work and back) and rarely need to spend money on gas. We never, ever buy shampoo or most other household 'consumables' because we are frequent...

D) DUMPSTER DIVERS! We do shop at Aldi for groceries but pick up the majority of our food, carpets, shampoo, laundry detergent etc from dumpsters. ESPECIALLY during the end of the school year when the local ritzy colleges let out and students are throwing out literally family packs of cereal and tide pods. It is a mega win since we don't spend money, have fun, and save the environment. Oh, and we sell used carpets on the side from dumpster diving throughout the year since that is a common throw-out item by the students. We regularly can discarded tomatoes, dehydrate bananas, etc from this and usually have fresh (seriously) produce each week that gets tossed for very minor blemishes, most of the time none at all. It's equal parts exciting and depressing.

All this to say that buying my Costco membership this year has turned out to be quite a disappointment. I'm going to return it since they do have an excellent return policy and will refund my membership since I'm dissatisfied.

You are a rock star!

[nancy33]

I bought my instant pot at Costco about a year ago and it is broken already. So I’m going to return it and that will make the membership worthwhile. It has started to have steam and moisture inside the digital display area when cooking and it is burning off all the liquid.  I use it all the time. Hopefully they will refund my money and I will get another one.

[partgypsy]

I got a costco membership, executive membership. It cost 120, I got 60 back as a gift card, and they say they will reimburse me if I don't make the other 60 in cash back. So far I got a bw laser printer, a laptop computer for my HS student. They both have a 4 year warranty. And some food (olive oil, spanakoptia, fruit, rot chicken), a couple bottles of wine, as well as some pharmacy/tolietry items.

My big mistake other years was - impulse shopping. I honestly don't do a lot of shopping other than grocery, and so I guess my willpower is weak? and I just bought more than I usually do, both food and nonfood items. And since it was all on the same bill I couldn't categorize it easily. There were some things that were amazing deals though. Swim googles. Speedo swimsuits for both girls. Decent cotton underwear.

Anyways some things that I will try this year is, go with a list. Only buy things that actually are more economical than regular stores than do entire grocery shopping there. If not sure wait and go back a different day. 

I do have some specific request for gifts from costco from people so will do that (electric blanket, set of porcelain bowls).
Oh yeah. Will have some photos developed from Costco for the holidays as well.

[hounton]

Costco is right by my house.  I go there every Sunday to fill up my tank.  I use the cc for 4 percent cash back.

occasionally I buy my family hotdogs for 1.50 and churros for 1 dollar.  cheap treats

Anytime they have something on sale it's a good buy.  Their normal prices are good, so sales are great.

I love their coffee.  I bring a thermos with me every day and it's on sale now for 4 dollars off.  I will buy many bags and keep it in the freezer.

Same when chicken wings go on sale.  I'll buy a ton an keep them in the freezer.

The best deal is rotisserie chicken.  They are as cheap as a normal chicken and taste much better.  I get many meals out of them.  I buy one every week.  This also saves on beef or other meats.

their salad lasts a long time and bananas are very cheap

cheesecake is to die for but only on special occasions.

great warranty, customer service, and cheap wine.  I love Costco. 

[HBFIRE]

Someone had recommended Costco Ameriprise for car insurance on this forum somewhere in one of these threads, but alas I cannot find it.  I finally got around to my yearly comparison shopping for car insurance/home owners insurance/umbrella policy renewal, and decided to get a quote with them.  The price difference was substantial, and it came with some nice perks like free roadside assistance.  I recommend checking it out.  For us it was about 30% savings.  We've been able to reduce our mileage substantially over the last 2 years and what a huge difference that makes on the rates.

[imadandylion]

Not worth it. I don't think paying for a membership in order to get a discount is a real 'discount.' lol...

Also, going to costco would require driving a car, which I don't have. They never put stuff like that in any place convenient. Easier to just walk to the local grocery stores a couple blocks from me and stick to the bulk section there... Not having a car and just generally being a smarter shopper is way more savings then a hundred dollars that *might* be 'saved' at costco IMO.

[nancyjnelson]

If you or anyone in your family needs hearing aids, membership is totally worth it.  Last year I replaced my hearing aids for over $3,000 less than what my previous pair of hearing aids had cost me seven years earlier.

Tires for your car also makes Costco membership cost effective.

[GoingConcern]

I think they are worth it:

1) As others have mentioned gas tends to be cheaper, around me it's around 30-40 cents cheaper.  That alone will pay alone for the membership.

2) Customer service is top notch.  Easy 90 day returns for most items and they have satisfaction guarantee will give you returns past 90 days due to defects. 

3) Electronics with their citi card essentiall get 4 year warranty

4) Staple items that are really cheap (rotisierre chicken, pizza, etc)  They also have other instant quick bites that are quality.

5) Obviously their bulk buying leads to good values (produce aside, I find the produce goes bad before you can finish it.)

Overall it's a great deal especially if you buy higher end food options. 

[HBFIRE]

2) Customer service is top notch.  Easy 90 day returns for most items and they have satisfaction guarantee will give you returns past 90 days due to defects. 

Actually their return is lifetime no receipt required!  Cash if you want.  It's legendary.  I returned a Vitamix after 6 yrs of use for a full cash refund.  The 90 day only applies to certain exceptions like TVs, computers, phones, and cameras.

[kina]

If you or anyone in your family needs hearing aids, membership is totally worth it.  Last year I replaced my hearing aids for over $3,000 less than what my previous pair of hearing aids had cost me seven years earlier.

Tires for your car also makes Costco membership cost effective.

Chiming in to give another thumbs up to the hearing aids. Major, major savings and their customer service has been top notch (DH has used their aids for years). There have been times when we thought he needed a new unit and was told, nope, just a relatively inexpensive part fixed offsite. Or they would adjust on the spot and hand it back working fine again (no charge). We have been very pleased.