Warehouse Clubs: To Join, or Not To Join?

A friend of mine who blogs at The Eatdown asked this:

Since you brought up Costco… I was thinking about biting the bullet and getting a membership. Would you recommend this? Only for certain items or what?

Excellent question. Actually it brings up two questions. Should you join a warehouse club? And if you do, which one should you join?

SHOULD YOU JOIN A WAREHOUSE CLUB?

PROS AND CONS

PRO: You WILL save money. Possibly in ways you never expected.

Buying in bulk undoubtedly saves money. If you have the room to store 30 rolls of toilet paper or several large jugs of spaghetti sauce, you’re going to get a good deal. But warehouse clubs deal in a lot more than that. You can find furniture, appliances, flooring, clothing, electronics, and more. I recently got a Whirlpool refrigerator at Costco for roughly half the price of similar models at other stores. And the “more” can be really interesting from time to time. For instance, Costco is carrying gift cards this Christmas season for several specialty stores, such as Godiva, at $39.99 for $50 worth of gift cards. This is a FANTASTIC deal, and one you can really take advantage of when Christmas sales and gift-with-purchases kick in; you’re getting twenty percent off before you even walk into the store.

(In interest of full disclosure, I DO have a hobby job at Godiva; there are other, different gift cards available, mostly for online concerns, but Godiva is the one that’s sticking in my head because I’ll be able to combine that initial twenty percent with my usual employee discount! BOOYAH!)

PRO: Clubs are ideal for people who use tons of ONE THING.

If you aren’t a parent, that pro may not jump out at you. Just let me say that buying diapers and wipes at Sam’s Club saved me my membership fee in four trips. If you entertain a lot, if you’re a small business owner, if you bake enough to wish that flour came in bigger bags, then you really need a warehouse club membership.

PRO: Warehouse clubs totally satisfy the freebie lover.

Seriously. They’re always sampling. If you come by in the evening, you’ll be disappointed — they’re out of everything by then — but usually (lunchtime is best) you can walk out with a nearly-full stomach without spending a dime. If you aren’t QUITE full, you can go to the little cafeteria they all have and get insanely cheap pizza or hot dog combos. Many are the weekend lunches we’ve had composed of  bits of lobster salad, hot wings, spinach ravioli and energy bars, topped off by the ubiquitous Polish sausage-onna-bun-with-fountain-drink.

CON: If you have very little space, this may not be for you.

Sure, you can still save a bunch on clothes and furniture, but you won’t get much of a benefit from the main attraction of warehouse clubs if one large bag of frozen chicken takes up your entire apartment-scaled freezer. If you lack storage space, consider carefully why exactly you want the membership.

CON: Infrequent shoppers don’t really save.

If you want the membership to really work for you, you need to save enough over the course of the year to cover that membership fee and then some. If you only shop once or twice a year — say, to get that giant box of frozen appetizers for your New Year’s party — then you probably aren’t getting your money’s worth. Of course, some people want it just to have occasional access to giant sizes, and don’t really care if it’s profitable. I know you’re smarter than that, right?

WHICH WAREHOUSE CLUB SHOULD YOU JOIN?

I have experience with all three warehouse clubs currently in operation in the U.S.: Sam’s Club, BJ’s, and Costco. My first club was Sam’s, as it was the only one in the area at the time. When BJ’s opened a half mile from Sam’s, we got a trial membership, and then decided to keep both, as they were useful for different things; I’ll go into the differences shortly. When Costco came to town about a year and a half ago, we gleefully ditched both BJ’s and Sam’s and joined.

SAM’S CLUB

What can you say? It’s WalMart writ large. VERY large. If you’ve never been in a warehouse club, they’re hard to describe; giant warehouses with huge products and a center section that shows they’ve realized that smaller items like clothes and DVDs and seasonal items like Christmas lights sell very well. It isn’t bad, but the extremely low diaper prices that originally made this one the shining star for our family have been eliminated. You’ll still save on diapers, but not the jaw-dropping amount that we used to save. It’s fine, especially if it’s the only one in your area.

BJ’s

Of the three, this is the one most directed towards individual consumers and families, as opposed to small businesses. Their grocery is outstanding, and you don’t HAVE to buy meats and produce in restaurant-geared packages. They even have a deli, something that neither of the others have. If you’re a bit panicked by the thought that everything in warehouse clubs comes in doghouse-sized containers, this may be the place for you. Of course, it’s also the smallest chain, so you may have trouble finding one. Our BJ’s just closed; I’m pretty sure the local advent of Costco spelled their doom.

DOOM I TELL YOU!

COSTCO

This is the largest chain, and the best overall. It has a lot of similarities to Sam’s, but for some reason they just do everything better. Prices, selection, customer service. We switched when Costco came to town because of the good experiences our respective families had with it, and we haven’t regretted changing. We buy our gas there because they consistently have the lowest prices. The only negative I’ve ever encountered there is that their deli meats mojo is weak: packages are large, selection is small, and prices are exorbitant.

I’m a wholehearted supporter of warehouse clubs, but I’ve always been a hoarder at heart. Miserly? No. Even the Bible approves:

In the house of the wise are stores of choice food and oil,
       but a foolish man devours all he has.  — Proverbs 21:20

That means it’s smart to have a little more than you immediately need. In addition to an emergency savings account, it means you’re never one paycheck away from starving. That’s always had a priority for me, for some reason. So, in conclusion, if you want to stock up, want some discounts, or even just want a place to graze for a free lunch on Saturday afternoons, warehouse clubs are a good deal. Even if you’re a starving college student, you may want to consider pitching in for a membership with your friends or roommates, and splitting large packages. If you have a 20-pound bag of rice in your kitchen, you at least can rest assured you have something to eat.

 Anyway, I’m really glad I have a membership. Do you have an experience or insight that you’d like to share?

Pennywisdom is written by Amy Heider Brown.

The Term “Cheap” Is So… Well… Cheap.

I’m a pretty normal person. Married, mortgage, one child. But I have a dark secret. I’m thrifty.

I’ve clipped coupons, taken surveys, shopped at scratch-‘n’-dent groceries, and even dived into dumpsters. I’m by no means the tightest wad out there, but while I’ve never really pinched a penny until it screamed, I’ve certainly taken great pleasure in making one whimper on occasion.

I am a thrifty person. Just don’t call me cheap.

I’m doing this blog to share the best ways I’ve found to save money, to save effort, and to get stuff for free. If any given entry I write makes you roll your eyes and go “Well, duh,” then congratulations! You’re thrifty too, and probably internet-savvy as well.  I’m trying to do this for everybody, especially people who may be jumping on the thrifty bandwagon for the first time due to recent economic unpleasantness. So join me on my gently-used magic carpet ($35 on Craigslist, and I only had to have it cleaned twice to get rid of all the cat dander), and let’s go on a thrifting adventure! Bring small bills. Your debit card carries too many hidden charges, but that’s a different post.