Explain Costco to me.

[ftg]

The get-in-with-a-gift-card thing is intriguing/puzzling.

Went onto eBay and saw that there was a standard cost about 7% higher than face value for a Costco gift card. That’ll take a good chunk out of any savings. (Plus you still have to pay a 5% non-member fee at the store.) But it might be worth it for certain items like tires or glasses.

But do you have to pay for all of your purchase with gift cards or what?

'Cause I also saw that people were selling emptied gift cards for less than $2. What are these for.? No real description of the benefit of the product they’re selling. I guess they assume we all know. Is it just to allow you to go in and look around? And then what?

(The online deal, pay only the 5% fee, sounds like a better deal for most non-food things that can be easily shipped.)

[lingyi]

There are a few catches with using Costco Cash Cards (they’re not called Gift Cards).

The 5% surcharge is only for online purchases, which may be lower than in-store. I never tried it at Costco.com, but as I stated above, when I’d try to buy online at Sams Club and chose instore pickup, the price would increase because I’m in Hawaii. It would remain the same (lower price) if I chose to have it shipped, but then the shipping was outrageous.
From Costco.com

“If you are not a member, you will be charged a 5% surcharge over posted prices for members (except for prescription drugs). This is because our ability to offer low prices on brand-name items is due in large part to our membership program, which is designed to reward members for their loyalty.”

The second sentence summarizes why the charge for membership (at least officially).

Source:https://customerservice.costco.com/app/answers/detail/a_id/1155/kw/non%20member
According to this site: https://www.wisebread.com/7-things-non-members-can-get-at-costco-including-cheap-eye-exams

“The tricky part is that you must be a Costco member to purchase or reload cash cards. One way to get around that is to ask a friend or family member with a Costco membership to buy you a $10 prepaid cash card. Some stores may only have $25 cash cards available. Another is to buy a Costco Gift Card online. You can use the cash card to get into Costco and pay for part of your purchase. You can then pay the remaining balance with cash, debit card, or Visa credit card.”

Source:[URL=“https://www.rd.com/advice/saving-money/costco-cash-card/”]https://www.rd.com/advice/saving-money/costco-cash-card/

From costco.com

"Costco has created another convenient way for members to pay for their purchases: The Costco Cash Card.

Terms and Conditions:

Costco gift card was issued by CWC Gift Card Co., a Virginia corporation. Use of the card constitutes acceptance of the following terms and conditions:

You must be a Costco member to purchase or reload Costco Cash Cards.
Available in denominations from $25 to $1,000
Members and non-members may use the Costco Cash Cards to shop at any Costco location in the United States, Puerto Rico, Canada and online at Costco.com.
Non-members will be charged a 5% surcharge over the member’s posted product prices (except for prescription drugs) when purchasing on Costco.com.
Costco Cash Card balances may be used toward membership or merchandise.
Costco Cash Cards have no expiration date.
A member may reload a Costco Cash Card at any Costco U.S. and Puerto Rico warehouse location. The member must bring the Costco Cash Card to the location.
Retain the original register receipt for your Costco Cash Card. Costco Cash Cards generally cannot be replaced if lost or stolen. If the purchasing member retains the Costco Cash Card receipt any remaining value on a lost / stolen cash card may be transferred to a new card for the member.
View the Costco Cash Card Balance at the bottom of the Costco.com home page.
Cash Card balances under $10 are always redeemable for cash. Amounts over $10 may be redeemable if required under state law.

The Costco Cash Card features include:

A convenient payment option in our warehouses, gas stations, and on Costco.com
Can be used as a supply card or gas card for businesses
Can be used as a means to provide students with money for food, gas, or school and dormitory necessities, while being able to limit their spending

Costco Cash Cards are sent with a zero balance. To activate, call the toll-free number that will be included with your card(s). For individual card purchases, please have the ship-to phone number available at time of activation.

For orders of two or more cards, please activate all cards prior to distributing to recipients."

Source: https://www.costco.com/Costco-Cash-Card.product.10024438.html

As always, Google is your friend!

Oh…and the selling of empty cards? People are gullible thinking as a non-member they can refill them or someone has figured out a scam using the card number.

[thelurkinghorror]

@bump

Nah, Sams and Costco do that in the continental US as well. I think they’re working off the theory that people will come in to get stuff llke cheap pants or coffee or whatever, and decide they really want a 48-pack of soda, even if it’s slightly more expensive than the grocery store sale price.

Not everything at those stores is always cheaper than elsewhere, even in bulk. Sometimes it’s the same price per unit, just in a bigger container.

Costco Coke comes in a 35 pack, I think Pepsi might be a standard 36? Anyway, it seems to be about $8-10 from my memory, so if your standard grocery store 12 pack is $2.66 to $3.33 then Costco is more expensive. I seem to recall that store brand soda may or may not be cheaper than that, name-brand rarely cheaper but it’s possible.

[running_coach]

@thelurkinghorror

Costco Coke comes in a 35 pack, I think Pepsi might be a standard 36? Anyway, it seems to be about $8-10 from my memory, so if your standard grocery store 12 pack is $2.66 to $3.33 then Costco is more expensive. I seem to recall that store brand soda may or may not be cheaper than that, name-brand rarely cheaper but it’s possible.

10.99 at my local Costco for Coke. Local supermarket store brand is 3 12pks for $10. Coke is normally 7.99 for a 20pk.

[Jophiel]

No idea about Coke but my Costco had cheaper ginger beer than the grocery store offered last time I bought some.

[Angel_of_the_Lord]

My partner and I share a membership with his parents (in return, they’re on my Hulu), but we’d probably get a membership ourselves if we weren’t. Back when I was living with my mom, I calculated that the savings on generic Zyrtec alone would cover our membership fee and then some, given we both took it every day.

We don’t buy a ton of things there, but the things we do get are staples that we go through reliably. Their protein bars are comparable to Quest in quality, but cost less than a dollar a bar, and I eat them daily. We also go through the Babybels quickly, as well as sparkling water and energy drinks. Their paper towels are great, too.

That being said, we’re still not the ideal customers. Our apartment and accompanying refrigerator aren’t big enough to allow for bulk purchases of most frozen or refrigerated goods, and there’s no way we could go through most of the other stuff before it went bad. Still, though. That’s around $260/year savings on protein bars alone. Probably another $50/year on my Zyrtec, and another few dollars on each bulk bottle of naproxen or Tylenol, which we go through regularly. And that’s just the stuff off the top of my head that we’re definitely going to buy regardless of whether or not it’s at Costco.

[Voyager]

@thelurkinghorror

Costco Coke comes in a 35 pack, I think Pepsi might be a standard 36? Anyway, it seems to be about $8-10 from my memory, so if your standard grocery store 12 pack is $2.66 to $3.33 then Costco is more expensive. I seem to recall that store brand soda may or may not be cheaper than that, name-brand rarely cheaper but it’s possible.

My store typically has Coke and Mountain Dew for $5 for a 20 pack on many Fridays. Sometimes it is even cheaper to buy 3 12 packs, but the $5 deal is reliable.

[hogarth]

@doreen

I shop at BJ’s not Costco - but it’s the same model. And I have never seen anything there that cost more than average for the same thing. I’ve seen things that I could get a better price somewhere else than than BJ’s was charging- but BJ’s was still below average.

Lots of people have mentioned soda as one item that can be found cheaper elsewhere.

From my point of view, I like bone-in rib steak and T-bone steaks about equally. At my local grocery store, I can often find rib steak for about $8 a pound. My local Costco doesn’t have rib steak, but it has T-bone steaks for about $12 a pound. (All prices are made up and in Canadian dollars). You could argue that $12 a pound is a great price for T-bone steaks, but from standpoint a great-tasting steak costs 50% more when I buy it at Costco.

[Balthisar]

@hogarth

You could argue that $12 a pound is a great price for T-bone steaks, but from standpoint a great-tasting steak costs 50% more when I buy it at Costco.

The typical grocery store meat, while cheaper than Costco, is also of inferior quality. I can get similar quality at some of the niche grocers, but everything is overpriced there.

[doreen]

@hogarth

Lots of people have mentioned soda as one item that can be found cheaper elsewhere.

I said

I’ve seen things that I could get a better price somewhere else than than BJ’s was charging- but BJ’s was still below average.

In other words, yes, I can often find the same soda cheaper at some other place- if it’s on sale. But that doesn’t mean that BJ’s is not *still *below average-my post was in response to someone who said certain items were more expensive than average at Costco.

I’ll use a different, made-up steak example*. Bone-in rib eyes are $8 a lb at the supermarket on sale. At Costco they’re $10 - but they’re also $10 or more at the supermarket when they* aren’t* on sale. And they aren’t on sale at every supermarket every week - so this week I might find them for $8/lb at Stop and Shop while they are $10/lb at all the other supermarkets. Costco at $10/lb in this example, is not “more expensive than average”

*you are correct , bone-in rib steak and T-bone are not the same thing, even though you may like them equally. It’s perfectly understandable that you would buy the cheaper one - but I don’t think you can compare completely different products to say that one store is more or less expensive than average.

[running_coach]

@Balthisar

The typical grocery store meat, while cheaper than Costco, is also of inferior quality. I can get similar quality at some of the niche grocers, but everything is overpriced there.

I usually buy ground meat. Local pack-your-own store-5.29 for 85/15. Costco-3.69 for 88/12.

[Dewey_Finn]

@thelurkinghorror

Costco Coke comes in a 35 pack, I think Pepsi might be a standard 36? Anyway, it seems to be about $8-10 from my memory, so if your standard grocery store 12 pack is $2.66 to $3.33 then Costco is more expensive. I seem to recall that store brand soda may or may not be cheaper than that, name-brand rarely cheaper but it’s possible.

I go to Costco once or twice a year when I’m visiting my parents or someone else who is a member and I can’t remember seeing Coca-Cola there but will have to check next time I am. I used to drink quite a lot of Coke but now only one can and that’s in the office at lunch. What I’ve found is that it goes on sale at holidays and special occasions like the Superbowl, so I buy multipacks at those times and stock up.

[Corry_El]

@doreen

I said In other words, yes, I can often find the same soda cheaper at some other place- if it’s on sale. But that doesn’t mean that BJ’s is not *still *below average-my post was in response to someone who said certain items were more expensive than average at Costco.

I’ll use a different, made-up steak example*. Bone-in rib eyes are $8 a lb at the supermarket on sale. At Costco they’re $10 - but they’re also $10 or more at the supermarket when they* aren’t* on sale. And they aren’t on sale at every supermarket every week - so this week I might find them for $8/lb at Stop and Shop while they are $10/lb at all the other supermarkets. Costco at $10/lb in this example, is not “more expensive than average”

I agree and comes back to what I said in previous overlong post. If you search out the best supermarket loss-leader specials they will be often better than Costco. On non-brand stuff (like meat) the supermarket quality is likely to be lower though. And for stuff randomly cheaper at this or that supermarket, how much time do you want to spend shopping around? Whereas certain stuff, soda has been given as example and is a good one IMO, it’s pretty likely there will be some special in the soda aisle of our basic (walking distance) supermarket that’s cheaper than Costco. We seldom if ever buy soda at Costco in fact.

But Costco ‘more expensive than average’ is clearly inaccurate IME on the great majority of items great majority of the time, correcting for quality.

Also comes back to how much you buy and convenience (our Costco 11 miles one way, supermarket a 10 minute walk). Our single kids don’t have Costco memberships and it wouldn’t make sense for them. They eat out a lot, they can ask us to buy stuff at Costco, they are busy wrt to going all the way over there. But for us not having a Costco membership because ‘how can you pay to shop at a store?!’ or ‘they make their profit on X’ would be irrational. It’s irrelevant but seems to always be the starting point of Costco-skeptics. The relevant fact is the store provides great value, including the membership. That doesn’t mean it’s the only place we shop or the best place for every single thing in its range of offerings.

[SmellMyWort]

OP hasn’t bothered to come back and respond.

[SmartAleq]

@SmellMyWort

OP hasn’t bothered to come back and respond.

Imagine our shock and dismay.

[kenobi_65]

@SmellMyWort

OP hasn’t bothered to come back and respond.

OP is still wandering the aisles in Costco.

[scr4]

@SmellMyWort

OP hasn’t bothered to come back and respond.

I don’t think the OP ever returned to their other “Explain” thread either (“Explain the love for Chick-Fil-A?”).

[ftg]

Thanks for the detailed reply, lingyi.

[Kevbo]

To address a few points from upthread:

Prices: Costco prices on mainstream commodity goods is usually, at best, only slightly lower. Coke is a good example. Supermarkets sell it as a loss-leader to generate traffic for higher markup items. Costco doesn’t do the loss-leader thing, except perhaps on the rotisserie chickens and snack-bar items.

What Costco DOES do well is the Kirkland Signature house brand of many commodity items. I have never been disappointed by the quality of these items, and they are much cheaper that equivalent (or inferior) name brands. Clothing, Batteries (car and dry-cells) OTC meds, contact lens solution, cling film (“saran-wrap”) etc. etc. Generally about half the cost of the name-brand.

Electronics: Costco does pretty well on current generation items. What they don’t do is discount heavily to unload older models. I have bought two laptop computers through them, one in 2008, and the other a month ago. I shopped carefully for both. I know I saved money back in 2008, but I don’t recall how much. The last one cost ~$400 + tax, but,free shipping, with the next cheapest online retailer (B&H photo) at $525 + shipping. So one item paid executive membership for the year.

Costco also tends to have just premium brands and/or top of the line models of electronics, so you can often find better deals on budget brands/models elsewhere.

The cart checkers at the door: As mentioned, they are there to prevent cashiers from failing to ring up their buddy’s steaks or whatever, but they also check for double-scanned items, which is easy for the cashiers to do. Also, with the cart-swap they do at the registers (usually each cart is loaded into previous cart after ringing) it is easy for large items to end up not on your cart, which they specifically check for.

Finally, Costco has an outrageously generous zero hassle return policy.

[Dahnlor]

One thing to add to all the above is the fact that they have a very good car-buying service. When I was in the market for a new car, I used TrueCar, AAA and Costco to set myself up, and the AAA price was negligibly cheaper than the raw TrueCar price (unsurprising since AAA actually uses TrueCar), while Costco was nearly $1000 less.