Motley Fool - Sun Apr 21, 3:00PM CDT
Image source: Upsplash/The Motley Fool
An estimated 73 million people have a Costco membership. So clearly, the store is doing a pretty good job of offering up great value.
See, most stores don't charge you a fee just to enter and shop. But Costco's entire business model is centered on membership fees. In fact, because Costco generates so much of its revenue from membership fees, it's able to offer competitive prices on the items it sells.
Costco's business model is also focused on customer satisfaction. It's for this reason that Costco maintains a very flexible return policy, and why it simply will not stock items it feels it can't offer at a reasonable price point.
But while shopping at Costco definitely has the potential to save you money, it might also, at times, bust your budget. That's because Costco does have some tricks up its sleeve that may be causing you to spend more money than you normally would. Here are a few sneaky ways Costco pulls that off -- and how to get around them.
1. Putting sale items at the front of the store
When you first walk into Costco with an empty oversized shopping cart, it's like coming in with a clean slate. So if you're tempted with sale items the moment you enter, you may be more inclined to scoop them up. After all, you haven't spent any money yet, so why not grab a neat-looking kitchen gadget or fleece blanket at a discounted price?
But of course the problem with falling into this trap is that you're buying things you don't actually need. So rather than adding items to your cart within seconds of entering Costco, force yourself to do a complete walk-through and tackle your shopping list in its entirety first.
If, by then, you're still tempted to go back to the front of the store and add one of those sale items, you've at least had time to think about it. But what may happen is you realize you don't need to add another purchase to a cart that's now full.
2. Tempting customers with free samples
Costco's free food samples are often regarded as a neat little perk of shopping at the store. But while they might make for a tasty snack, they also have the opportunity to lead to impulse buys.
It may be that ravioli bites weren't at all on your radar. But then you tasted one when you were hungry already, and boom -- you're bringing home a $15 box of ravioli bites when you're not even sure it's something your kids will eat.
It's perfectly okay to enjoy free samples at Costco. But don't let your taste buds alone guide your purchasing decisions. Instead, be practical and ask yourself if the item in question is:
- One you need in a bulk quantity
- One your family members are likely to enjoy
- One you even have room to store
You might enjoy the bite of the ice cream sandwich you sample on your way to the checkout aisle. But do you really need 48 of them? And do you even have room in your freezer? And if you do have room, will fitting that giant box of ice cream sandwiches mean not being able to fit staple items, like chicken nuggets and French fries, that you rely on as quick meals for your kids? These are the questions you need to ask yourself before you buy a product you've sampled that wasn't on your list.
3. Stocking so many rotating products that you're constantly tempted to buy new things
The fact that Costco frequently rotates its product line is a good thing. But it can lead to extra purchases, since you're more likely to get excited about a new product than the same fleece top you've seen on the shelf for months.
If you frequently overspend on new items, you may want to set a monthly budget for Costco impulse buys. That way, you're more likely to enjoy your shopping experience, but you may be less likely to really go overboard.
So for example, you may decide that you can afford to spend $30 a month at Costco on non-essential items. You could then use that $30 to buy a single piece of home decor, or you could use it to buy two different snacks for $15 apiece.
Costco is really good at getting consumers to spend money. And look, it has to be in order to be successful. But you don't want your love of Costco to wreak havoc on your finances. So do your best to avoid impulse purchases so you can enjoy the savings a membership has to offer.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
