By Michael Beyman
CNBC
On a warm, late November morning in Augusta, Georgia, workers are putting the finishing touches on a brand new Costco Wholesale warehouse, set to open in less than 24 hours. This is the 597th Costco location – the 20th opened last year – and employees are racing to install light fixtures, paint doors, and stock the last of the shelves in time for the grand opening.
Warehouse manager Waymon Bell is keeping track of every last detail as he begins his tenth lap around the building, inspecting the aisles of merchandise and checking in with his workers along the way.
“We’re in a facility that is three acres under one roof, so we do a lot of laps around here,” Bell said. “There is still a very long list of things to do, but we will, without question, make it. I’m looking forward to tomorrow morning.”
Though the last-minute burst of activity may seem like the typical preparations for any store opening, Costco is anything but a typical store. Its floors are bare cement, its ceiling nothing but stark steel beams and skylights, and most of the newly-delivered merchandise sits on the same industrial pallets on which it was shipped. There are no signs or directories, and customers have to pay a membership fee before they can even walk in the door.
Such a lack of frills might seem like a deterrent to would-be shoppers, but there is no evidence of that in Augusta, where individuals line up patiently to join 64 million other Costco members in a retail revolution.
Costco’s low prices and bare-bones operation have not only changed how people shop, but how much they buy. Those unmarked aisles force customers to wander, creating opportunities for them to stumble across – and pick up – items they weren’t expecting. It’s a common Costco experience for customers to spend more than they anticipated.
“I thought I would spend about 25 dollars, and I ended up spending over 700,” says Gail Creighton, as she left the Hackensack, N.J., warehouse. “It’s why my husband never lets me come here.”
Brian Wansink, a professor of consumer behavior at Cornell University, says it’s no coincidence people overspend. “Shopping at a warehouse club gives us license to spend like we otherwise wouldn’t if we were in a normal store. We are motivated to save money, we are motivated to recoup our membership fee, and as a result, we might even end up spending a bit more.”
Spending more can be tough to avoid when almost everything is sold in bulk. Waffles are sold in packs of 60. Costco’s eggs are available in packs of 90. Mayonnaise is sold in gallon jugs. “It’s part of the American psychology,” explains marketing consultant Pam Danziger. “More and bigger is better.”
Despite the idea that customers like more, Costco stocks surprisingly few items, only around 4,000. The lack of selection is deliberate. “There’s only one variety of ketchup,” Danziger explains. “You don’t have to choose from a variety. They’ve edited it down for you. You’ve paid them to do it.”
Costco’s selection in any one category of goods may be limited, but it actually features a wide range of products. Three-quarters of what it sells are what it calls “triggers,” staples such as cereal, detergent and paper towels. The remaining 25% are what Costco calls “treasures,” items that make shopping an adventure. Turn the corner and you might find Sony flat-screen TVs, Cartier watches, and Prada handbags that appear on Costco’s shelves one day, but are gone the next. That uncertainty creates a sense of urgency, and is all part of the Costco shopping experience.
“What Costco does is it really understands their consumer,” Danziger says, “understanding what’s going to excite them, and then making sure you have the product that’s going to be there to excite them.”
Costco does draw complaints from its members. The biggest? Long lines at the checkout.
“It’s too damn long” says Costco member Peter Million. “It takes a long time to make your purchases.”
Another common criticism: having to buy everything in such large quantities.
“The real peril of the warehouse club is not that you spend too much money,” says Wansink. “I think it’s that you actually waste the food because it goes uneaten or you end up eating way too many calories.”
Costco’s sparse layout and no-frills shopping experience certainly create an image of a discount operation. But do shoppers really save money by shopping there? The company says that nothing in the warehouse is marked up more than 15% - considerably lower than the 25% mark-up at an average supermarket, or the 50% mark-up at a typical department store. And a recent independent study by Consumers’ Checkbook, a non-profit consumer advocacy group, confirms that Costco’s prices on food alone are about 30% lower than the largest supermarket chains.
Costco also claims a low price doesn’t necessarily mean something is cheaply made. The company’s single best selling product – its Kirkland Signature bath tissue – undergoes regular, intense scrutiny at Costco’s headquarters in Issaquah, Washington. Blue-coated lab technicians subject toilet paper to a constant battery of tests, checking its thickness, strength, softness and color. Corporate buyers also make repeated visits to the eight paper mills that make it, checking every detail and searching for flaws. All that effort may sound a bit obsessive, but Costco sells $400 million worth of toilet paper – more than a billion rolls – each year.
Whether it’s redefining the store layout, keeping prices lower than its competitors, stocking an eclectic mix of products, or building a better toilet paper, Costco’s success at redefining retail is undeniable – the company weathered the recession far better than most, and its stock price has continued to perform strongly.
Costco’s also created one of the most devoted followings of any store in the country. On the morning of the Augusta warehouse’s grand opening, Rachel and Danny Devine arrived early with their children to be among the first inside.
“We’ve been waiting for a Costco ever since we moved to Georgia. We were members in Maryland and Utah,” Rachel Devine says. “We’re really happy Costco is here.”
For Costco, it’s doing the little things right, over and over again, that has made the company a success, and made its co-founder and recently-retired CEO, Jim Sinegal, a very wealthy man.
“I think to most stories, there’s always a bit more behind the curtain than you expect,” Sinegal told CNBC. “Generally speaking, when people ask, I tell ‘em ‘all we’re trying to do is sell stuff cheaper than anybody else.’”
Editor's Note: Carl Quintanilla's hour long CNBC Original documentary, 'The Costco Craze: Inside the Warehouse Giant' premieres Thursday, April 26 at 9pm ET/PT on CNBC. The documentary will re-air on April 28, April 30 and May 4 on CNBC.
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Say what you want but Costco is a better choice than Sam's aka Walmart where all you can choose from are last year's models and Sam's Club Only models.
Costco is great and I go there often but if consumers are careful and shop around they can find lot's of other great deals that are better than Costco.
They are pretty much the same place, i've tried both of them...and neither is leaps and bounds better than the other. I did price comparisons, and ended up sticking with Sams because the things I buy (and can use before it expires) were cheaper at Sams than Costco.
One thing that Costco does not do is "loss leaders." These are items that supermarkets sell at a loss just to get you into the store. So, you can usually find canned goods cheaper at the supermarket if you watch the sales.
We used to go to Costco regularly. You do spend more. They have prepared foods that are great, but pricey. It ends up being cheaper to go to a grocery store that is competitive and cooking yourself. Costco lends itself to impulse buying, something we can live without.
It is good when you have to buy water and drinks in addition to paper goods just for the convenience of having it available. Otherwise, you spend too much.
I may have missed it in the article, but I did not see mention of the storage issues. We have a large house with an extra freezer. Even with that, buying by the case can be cumbersome.
do other places have things cheaper than costco...yes until you factor in the cost of gas, which most people don't. i won't drive across town to walmart just because i might save 10 bux. the gas eats up the savings. i shop at costco because it's close and the closer safeway is an older model store (built in the early '70's judging by the architecture) and thus a smaller store with limited space. an example is there's not soda/chip aisle because there's not enough room all sodas and chips are end caps. bottom line i don't run all over town chasing the best deals. i used to and for 3 mos i did keep track of my spending and saved almost $600 total but i also kept track of my gas as well with a very fuel efficient car that got 30mpg and my gas costs hit $810.89 over the same period so i actually lost money. my wife thought i was crazy until i showed her the data and now she's convinced. it's part of what led us to shop local produce markets and buy meat the day we plan to consume etc. we also got rid of the extra fridges in the garages, which btw saved us almost $100 in electricity bills. we still shop at costco, just bought my car batt there, we also buy tp, paper towels, tampons, napkins, plates, wine,beer,liquor, some meat (i like my meat bone in and costco only sells boneless), basically bulk stuff we're gonna use anyway. we never buy frozen premade foods. we make our meals fresh every night using fresh ingredients and spices and herbs from our garden (in our apartment). it's been a great change for us overall. we've even gotten our neighbor on board who has 3 kids and her and her hubby work 50hrs a week. we also watch almost 50% less tv because of prepping dinner and tending garden and shopping for the day's meals. we also buy less junk. i'm a software engineer and work sometimes 70hrs a week and my wife runs her own business with occupies a lot of time as well. so if you think it can't be done it can. it's not easy but with time it becomes the new normal and with increased energy and more money in your pocket it becomes very enjoyable.
Our Costco has a gas station there for members only and it is generally 20 cents less per gallon than other stations so I just add it in to the errand of going to Costco. And you can not beat their prices on contact lenses either.
1800contacts does at least for my brand.
After watching the toilet paper part of the story, I'm just so happy that Costco employees are looking after my tush. I will think of them every time I wipe.
I have no need for mass quantities of anything so I avoid these places. I think it's correct that you actually spend more in discount places. If you go to a regular store you tend to buy only what you need.
Certain items, as long as you've got space to store the excess, buying in bulk doesn't matter. Like toilet paper or paper towels.
@inorbit,
The falacy in that statement is that you pay a huge prmium for packaging. You can get a quart jar of pickes at the supermarket for the same price as a gallon of the same pickles from the same manufacturer at Costco.
And in the area of meats --- the meat at supermarkets is a full grade below what Costco and Sam's sells (regardless of the supermarket labeling) for about the same price.
You actually have to pay extra for the privilegde of buying smaller amounts and it is all in the packaging.
Chris #2.2, I completely agree with you. the meats are really nice, and the larger quantities you buy can be frozen easily. Produce is much better too. I buy paper products there, and simply store the extra. Costco is great in my opinion.
Actually, Chris, it is not true that you are saving on packaging, at least not substantially. We have a packaging company. The manufacturers come to us to repack their product so that it can be sold at the warehouse stores. Where do you think they pass on the cost?
Walmart is cheaper for alot of the items due to their logistical operation with their own DC's. They are brutal to work with but the consumer does make out in the end. So if it is about saving a dime, Walmart is the answer and not the warehouse stores. Just some inside knowledge I thought I would share....
I've never been to Costco ... but we do use Sams for paper goods and cleaning products. Great buys on that and we have the luxury of storage space. They also have a few food things that aren't available in our town that I like. Plus .. if you time it right, a free lunch with all the samples! :)
i will not freeze meats and what do i need with 6 ribeyes with no bones. on top of that costco does not get a higher grade of meat. the highest grade of meat goes to restaurants. the best tasting food is always fresh and frozen is not fresh and costco meat is frozen then thawed, i know this because my friend worked there for 7 years and told me that's how they do it. as for the grade it's whatever they can get. any halfway decent professional chef will tell you fresh is best and if it's been frozen it's not fresh. i get the most compliments on my food...not because i'm necessarily a great cook but because i use only the freshest ingredients. i blow peoples socks off with my pasta and red sauce because i make the red sauce while the noodles cook...it's that easy. fresh is best...always.
Go with a buddy and split it.
COSTCO actually sells DEFROSTED meat? So, when I go home I am RE-FREEZING meat? I thought that was unlawful...it certainly is unhealthy...I am now going to find out if this is true...and if it is, I am going to spread the word...DO NOT BUY MEAT AT COSTCO. I am so disappointed!
now mind you that was years ago and things do change. my point is that their meat is not fresh and you shouldn't buy meat take it home and freeze it. you should instead buy meat the day/evening you plan to cook it. i have noticed some meat in grocery stores is previously frozen like pork spareribs and some chicken as well. there's also a difference between frozen and on ice too. at any rate if you buy your meat the day you plan to cook it it will taste better hands down. :) fresh is best!
I have a solution that works much better for me.
I don't eat dead animals. (I have been known to nibble a bit on live ones.)
@khayman,
Pretty much everything you just said is pure b.s.
no not really. i've been in safeway and have held still frozen spare ribs.
fresh is best. any professional chef worth their accreditation will tell you frozen meat tastes worse that fresh, the texture is totally different. you simply can't argue that.
and yes you can make an awesome red sauce in the time it takes to cook the pasta. i do it all the time.
you can't tell me basil bought in the spice section of a grocery store tastes as good as the basil i can pick from my window sill.
now i have to shop for tonight's dinner as i plan to grill some hoi sin kabobs and i need to go buy the meat. :) (the hoi sin is homemade too btw along with my ketchup, mustard, and bbq sauce. all surprisingly easy to make at home in little time.)
I've done almost all of my shopping at Costco for years. (I just go elsewhere for the few things I use that they don't carry.) I live in Southern California, where we had another similar company (Price Club) which Costco bought out and re-branded in the mid-90s, so the warehouse stores have been around a long time here (the location I go to is a new building, but they have been on that site since '79). We keep the spending under control by making a list... and even though the aisles aren't marked, there are sections - most of the food is along one side and the back wall, for example. And it is way cheaper - I've seen milk in regular stores for at LEAST 7% more, cheese is usually 40-50% more (similar price for half the product? wha?), etcetera. Their on-site gas station is always either the lowest, or tied with the lowest, in our area, too, and they don't charge an ATM fee like some gas stations do. And that's the basic products that you CAN'T "go cheap" on. And their pumpkin pie (sadly seasonal) is the same price as the ones they sell at the bakery restaurants and the grocery stores... but so much bigger, it literally weighs 3 1/2 pounds!
By the way, "almost all" of my shopping including clothes. Most of my pants, socks, and half of my shoes come from there, too. Those white sneakers of theirs last twice as long as the ones you buy anywhere else for the same price.
Couldn't agree more whitestar...been shopping at Costco for years as well. Never a disappointing experience (even when I went there to get the flu shot once! LOL!) Lowest price per item than any other grocery store on the things I need after you do the math: Milk, paper plates/towels/toilet paper, shredded and sliced cheese, eggs, ground turkey meat, etc...and all the the products they carry are great quality! Oh, and you said pumpkin pie!?!?!?!? Delicious!
I travel 6 or 8 hours just to make a Costco trip! Granted, we have family in those towns too, but it is always nice!!! It is always a one stop shop for us and that makes it great. Cheese, meats, lunch meats, laundry soap, toilet paper, paper towels, you name it!! [=
I'd love to shop at our Costco more, but right now it is overrun with Canadians (seriously). I can't stand it, we have the smallest square foot store in the country, but it is the busiest. We need another one closer to the border!!!
I do most of my shopping there as well. The prices are excellent. The store has just about everything I need - one stop shopping is heaven for me...not to mention, if there is ANY problem with ANY item...return it! No questions asked..nice and easy.
Try the chocolate cake- OMG - YUMMY!
what's the point of driving across town to pay many $.05 - $.10 less in gas? by the time you factor in your time and the mileage it's usually a loss. did it for several co-workers and found they were losing an average $15/mo on gas than if they went to the local chevron and bought their 87 grade. i encourage everyone to look at the hidden costs of things, these costs that aren't necessarily in the listed price like your time or the drive costs. i've known costco for a long time i even remember price clubs what i remember most even as a child is driving there. i lived in mesa and it was still a 20min drive to price club without traffic. here in ca now it's about 20 mins as well witch is just not worth it when safeway is walking distance and raley's is a 3 min drive away. the point is costco/sam's club are not within convenient distances for most people.
AJN623I travel 6 or 8 hours just to make a Costco trip
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Isn't that a bit obsessive ?
You just need to be careful you will be able to use what you buy before it goes bad without over-indulging. They have good deals on a lot of luxury items and foods, but I always ask myself "Is this something I would normally buy in a grocery store on a regular basis?" If the answer is no then I don't get it. They really need to lower their electronics prices, since normally they are nothing special. I've noticed if you are shopping for a big item (TV, bed, swing sets, etc) typically the daily deals are OK, but if you are patient and check frequently they have some excellent sales.
I've found that although their prices on certain electronics are maybe within $10 of what I might find at Amazon or another large retailer, Costco's version is often packaged with bonus items (such as a camera case or memory card for a camera, for example) that add to the value, and my experience with their tech support and customer service have really made it worth it for me to buy the item from them instead of someplace else, even if the price is pretty much the same.
And you're totally right about not letting yourself get side-tracked in the warehouse (go in for milk and come out with plasma TV...). Saying that people don't save money because they spend too much buying things they don't need makes it sound like Costco's prices are not good when really the problem is that many people just buy things thoughtlessly.
Agreed! -- Thoughtless buying is the problem.
We throw virtually nothing away. Nothing spoils at out house because we check what we have when planning meals. We put patches on clothes to wear them out completely and maintain a disciplined shopping list that we double check before we go shopping.
If you think about what you're doing, you can really save shopping in quantity. For example, the big cans of ketchup will fit exactly in two large plastic ketchup bottles that you can reuse again and again. We've been using the same two for ten years.
My ONE complaint about CostCo is that to create large size packages, manufacturers often package things with waaaay too much waste. For example, graham crackers are inside a paper wrapper that is inside a cardboard box that is inside another cardboard box. That's one cardboard box too many, at least.
As far as electronics, they were in the beginning a good deal. We have found that to no longer be the case. They either are not cutting edge or just plain more money. It may be regional.
I have actually took the time to cost out the products and rarely are they cheaper. As far as packaging (Porter) that situation exists because they have the manufactureres repack their products. The original product is place with more units in a larger package.
You're right about electronics. I never buy anything like that there. It's worthwhile to do at least some comparison shopping to be sure. But for the things we buy, we maintain that it's still a good deal.
I know why the excessive packaging happens ... CostCo can call the shots on these things, however, and they could solve this problem if they wanted to. I was just complaining about one of the few things that I actually dislike about CostCo.
the assertion in the article about sizes being too large or that you can't just buy one of something (e.g., 12 pack rolls of toilet paper towels) is accurate, and probably does lead to waste. one place where the business model is actually efficient is here in utah with many families having 6, 8, 10, or even twelve members. a family like that can really go through a gallon jar of mayo rather quickly. one has to see the polygamous families consisting of 15 to 20 or more members loading up the biggest sized pick-ups made to understand how bulk buying really saves money.
I love Costco! If you shop sensibly, you can shop at Costco without spending too much. For people with no impulse control, Costco might not be a good option. (Actually, people with no impulse control should just stay out of stores to keep themselves safe!) They really support their customers, too, which I appreciate. No nonsense with returns and tech support for all electronics.
Pretty much everything in my house came from Costco--from the rocking chair and leather chair near the fireplace to our wedding rings to the sheets on the beds (and actually, the beds, too!). I really like being able to get everything I need at one place instead of making a dozen different stops. And we split some of the bulk purchases that are too large for a single family with friends and family to make it cost-effective--like having our own co-op. From what I've read, they have a pretty good corporate structure, too, with decent working conditions for employees and such, which makes me feel better about shopping there than at someplace like Walmart.
Costco is a ripoff. You can do as well by shopping intelligently at Safeway, buying in usable quantities, and having much greater selection. Costco also doesn't provide a checkout line for those with only a few items, so everyone has to wait. My biggest complaint is that after you check out and exit the store, you have to wait for the "little Nazi" to check your cart to make sure you haven't stolen anything. That takes another several minutes. All that said, I still go there because the toilet paper and diapers are a good value but there is lots of room for improvement before we canonize this company.
I always wondered about the door checker, until one day they found out I had been OVER CHARGED! The clerk had rung up 3 cases of soda and not two. They took me immediately to customer service and gave me back my money. So I guess it works both ways.
I don't mind the door nazi's. They're mainly there to hold down theft and fraud and that also keeps prices lower. Too bad that we need people like that but we do. And Walmart has them too, but they're not as thorough about it.
I think I get MORE annoyed at the "little Nazi" who won't even let you walk in to the store until he has seen "your papers".
just an fyi about that receipt checker. legally he cannot go through your bags unless (1) he has a warrent or (2) you give him permission. i refused to let them check it once and they ended up physically restraining me and not allowing me to leave the store. big mistake on their part. even their own lawyers said it wasn't legal and to boot by not letting me leave the store could be construed at least as unlawful restraint and at most intent to kidnap. the reason why is this. you have paid for your groceries and thus you own them not the store. if they insist on searching you without some sort of probably cause ie a magnetic alarm going off they are violating your rights to a lawful search. it's so much fun when they call the cops and the cops tell them they have to let you go without searching your stuff or if they do the search without your consent they leave open to you a civil rights lawsuit. i've done this at costco, sams, best buy, and anywhere that insists on searching MY things without a warrant. also worth noting is the implication of checking every customer's cart: we have to check your cart to ensure that you didn't steal anything with the implication being we (the store in this case costco) believe all of our customer's are thieves or potential thieves. to me that is just about the worst type of customer service there is. it always leaves such a bad tasted in my mouth.
on a side note most places just let you go without searching your stuff of causing a scene.
... and people think some of the things I do for entertainment are strange ...
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To each his or her own ... but I'm happy to let 'em look through my stuff.
it's not entertainment it's about principles that this country was founded on. i will vigorously defend my rights as outlined in constitution and the bill of rights and subsequent amendments.
i also resent the implication by the retailer that i am a thief which is what checking your stuff before you leave does because you have paid for it and it is legally yours. if each individual american doesn't stand up for each and every one of their rights then what's the point. i'm tired of corporations walking all over me because the majority of americans are apathetic or too worried about their time. i do what i do as a consumer advocate because i'm a patriot and i care about my fellow citizens. know your rights and don't give them up for any reason for any circumstance because if not then one day they may be gone.
What an idiot.
But why are you so focused on "vigorously defending your rights as outlined in constitution and the bill of rights and subsequent amendments." (sic) Just as an outside observer, it seems to me that you must be getting some kind of emotional reward for acting this way in public because it doesn't make any practical sense for any other reason.
Some rights really are worth fighting for (free speech and voting for example) and some are not. I find it much more soothing to go along and get along with something like this. (England doesn't actually have a "Constitution" as such and they get along OK without one.)
Retailers aren't saying that you are a thief. They're saying that some people are and they don't know if you are or not. Practically speaking (New concept for you?) how is a retailer supposed to tell the difference between you and some thief?
that may be your opinion but do you have any substantial arguments to disprove what i've posted? do you think you could make a logical argument based on a sensible premise to disprove my logic/empirical evidence instead of using ad hominem attacks which just show your lack of understanding of an intelligent debate? can't you provide just a little empirical evidence to refute mine?
@porter
it's implied and it's not good customer service to even imply you think a customer is a thief. they are basically saying we think you are a thief let us check your stuff and prove you are not. i reject that on face as do most if not all civil rights attorneys
fundamental rights are fundamental rights i'm not going to sacrifice my freedoms for convenience. it's not right. i don't make a scene that's not my intention just like the blacks who sat at lunch counters; they did not intend to make a scene. they just wanted the rights that the constitution said were theirs and were being denied. my intention is live exercising the the freedoms afforded me. i won't let a cop search my stuff without a warrent and i won't let them in my house without one either no matter what. these retailers have no right to search my belongings. under the law once payment is rendered at the register those items are mine and not the retailers. there other ways retailers can prevent loss/theft than by violating my constitutionally protected rights. they just don't want to because it's cheaper to violate my rights than to do what is both the legally and morally the correct thing to do like hire more guards, more vid surveillance, etc.
i vigorously disagree with you all rights are worth fighting for simply because they are rights. since you brought it up my curiosity is now piqued what rights do you consider worth fighting for and which ones do you not consider worth fighting for?
i do get an emotional reward and it's knowing justice is being done. i could care less if my protestations happen in the store or in some room it matters not to me. what matters to me is letting corporations know that i am aware of my rights and i'm not just going to lay down and yield them. it's that simple. it's not about making a scene it's about doing what's right and how i feel about my deeds at the end of the day.
They oughta make you wear a sign so people can cross the street when they see you coming.
@porter
that's the best you have? can't attack me on substance so you revert to petty ad hom attacks hoping to instill an emotional response from me. not going to happen. you have refuted not one of my arguments. you have shown no logical flaws in my premise or conclusions and have refused to answer even the most basic questions i've posed to you regarding what rights are and aren't worth fighting for.
While you are right that they cannot search you legally without your permission, since Costco is a membership store, they CAN (and often WILL) revoke your membership if you do not submit to the check. Because you are a voluntary member, you basically have agreed to follow their rules. If you refuse, they have the recourse of cancelling your memberhsip (of course, they have to figure out who you are, but with the cameras around, they can back track to the register and figure out your membership number if they really wanted to).
Personally, I don't mind that much, because it does prevent some stuff from being taken (either on purpose or by accident, as just happened to me yesterday when they didn't charge me for the water I was buying). Keeps prices down for everyone, and avoids "shrinkage".
Love Costco and is a weekly stop for us. Whether it is for toilet paper, paper towels, bleach for the pool, or just their excellent fruit and veggies. Yes, you buy bigger, but you buy what you know what you can use before it goes bad. 30 rolls of toilet paper for $15 is pretty darn good. You pay $12 for 12 rolls of Charmin at the other stores. Also paper towels, you pay $15 for 12 rolls where you would pay $24 at the other stores. If you have the room to store the items, it is a substantial savings over the long run. Their customer service is top notch, you CANNOT say that for Wally...I mean Sam's Club.
Costco fools a lot of people into buying a lot more then they need. Customers justify it by stocking up on items where much of it will eventually get thrown out or expires. Most people don't need to purchase a gallon of ketchup or mayo at a time, and much of the time it just gets discarded or left unused.
However, most people still like the idea of walking out of Costco with carts full of items, thinking they've gotten a good deal. The prices are good, but it only matters what eventually gets consumed or used.
I don't get to go to Costco often because it's so far away and we have to make it an all day trip. But for me, stocking up on paper towels, TP, Kleenex, with the added vegetables, fruits and milk, well worth the trip.
However, I find if I don't take my husband with me, I save a great deal of money :)
It's amazing how people have embraced the acquisition of unnecessary material possessions. What happens when the credit cards max out?
What credit cards? I've been a Costco shopper for years, and other than my student loans, I'm debt-free. Not even car payments.
The only credit card that Costco accepts is American Express...and like a debit card they don't let you carry a balance.
However, over-spending is always a part of my Costco experience...I go in for the usual and customary items needed every week and walk out with water ski jackets for the kids, clothes, etc. It's not that the items are not needed/desired but I didn't go there to buy them. As noted in the article if you see it and you want it you better buy it because once is gone it may not be back, or won't be back until next year.
Credit Cards?! Unnecessary material possessions?! I live in a household of 2, we shop at Costco almost every week, mostly for food and beverage and we never waste food. We have our trips down to a science, knowing exactly what we need for the week...ie how to make a few meals using the 20 chicken legs that we get in a pack so that nothing goes bad. We buy a lot of organic products at Costco too, which are almost always cheaper than the organics at the local grocery store.
Credit card????
In twenty years, I have paid ... ummm ... 50 cents in interest. (On anything ... no mortgage, car payment, or loan of any kind. The 50 cents was a mistake. I could have protested and recovered it but I figured it would cost more to do that.)
On the other hand, I have been getting kickbacks on my credit cards for-ever!
By the way ... debit cards are for fools. There is zero advantage to having one and we never have. Credit cards have built in protection. We have protested half a dozen charges over the years and won every last one of them. You're much less likely to win with a debit card because the rules are different and they already have your money.
I shop at Costco bi-weekly for my family of 4 and we have about $100 worth of rolling "debt" on our single credit card. :P
i've won every time i've disputed an errant charge on my debit card. btw the rules are the same if it's branded with a visa/mastercard logo. my biggest irritant are businesses that don't know the rules on these cards. i frequently give my wife my card to do purchases but half the time merchants refuse the card...why? because i'm not there which they have no right to do. anyone can use my card to make purchases if i give them my permission. it is MY responsibility to check my statements for unauthorized charges ( i check all my cards at least 3x's/day).
also worth noting in the contracts merchants sign to accept visa/mastercards there's a stipulation that the merchant will not set minimum required purchases or charge a processing fee to accept visa/mastercard card's. many do and i report every one. i file a claim with the card giving them the merchant number and i usually get the charge back in some form. now this isn't necessarily the case when one uses debit (put in your pin) but it's still good to do as some merchants charge a lot for debit transactions which depending on your state could be illegal.
Ummmm ... the rules are different. This isn't the most reliable site (it's the first one I found) but as one corroboration:
http://www.ehow.com/facts_6371008_debit-vs_-credit-card-liability.html
An individual company might take steps to eliminate some differences, but the federal governing law was passed at different times and with different goals.
When credit card enabling legislation was passed, the whole concept was new and the banks had to convince people that they weren't going to get robbed with this new-fangled thingy ... so the enabling legislation prescribes a minimum procedure that gives the consumer real rights. If you follow the procedure on the back of the statement, the bank and the merchant MUST respond in a certain way. When debit cards were created later on, the banks had more control over the legislation that was passed and the shoe is on the other foot. Rather than the burden of proof being on the merchant, you have to show that you didn't make the purchase and then seek a refund.
To use an ad slogan I have seen, a debit card, "Works just like a check!!" People seldom ask, "Why is that an advantage for me?"
experience simply denies what you're saying my friend. i have made numerous claims to visa and mastercard debit cards over the years and all i do is call, dispute, they issue a provisional credit, and two months later i get a letter from the bank saying the provisional credit is now permanent. now, that's not a lot of work and required me having to prove nothing. this has probably happened 6-7 times over the last 15 years or so with one time myself getting money back simply because the bank found that while i had made the withdrawal from the atm the vendor did not update the atm address.
also i rarely use the debit function on my card and almost always opt for the "credit" as that then gives me the protections afforded visa and/or mastercard users. i've gotten several businesses in trouble with visa/mastercard for minimum purchase requirements and "processing" fees.
i now stand corrected as the frank/dodd act now allows minimums to be charged for credit cards but there is no provision for debit cards and thus my premise is still mostly intact.
Well ... I have to say that I find that quite interesting. As I said, I have never had a debit card so I don't have any personal experience to quote. But I do know people personally who tell me that they have had unexplained debits that they could never recover.
Suppose, for example, that the bank says you withdrew a bunch of money from an ATM with your card and you say you didn't. Who is going to win that one? (I have also never had a PIN number and never used an ATM. And, for the record, my business is computer software so I think I'm up to the challenge.)
different banks have different policies but i can both citibank (shiXXybank) and well fargo always take the customers side in any dispute
as for your scenario a simple look at the camera in the atm in question with date/time stamp will easily prove whether or not you made the withdrawal.
i am a software engineer myself. i have dozens of pins and passwords and have learned some basic crypto techniques to keep them from prying eyes. i do write some down in encrypted form but if you don't know the cypher they're pretty much useless. my computers are integrated in every aspect of my life. i'm looking forward to the time paper money goes away...i love me some google wallet. :)
I have been to Costco a couple of times as a guest. The bulk thing is a great idea. But where do you store all the "bulk"? This is the reason I passed on a membership.
It's not that hard. It just takes a little thought about what you're doing. You could store the excess on virtually everything you might buy on one set of cheap steel shelves in your garage.
On the other hand, if you're the kind of person who has to have everything right there in the kitchen cupboard, then ... yeah ... you have a problem. (CostCo doesn't have the problem ... You do.)
I don't have a problem, nor dislke the store. I just live in a very small home, and we are a family of 4, that's all.
We're a family of two and it works for us. But, "que sera, sera."
if you have a large household then costco may be worth it. I dropped my membership after I started seeing prices at my local grocer lower than costco's for the products that I purchase regularly.
There are just two of us. We buy the big packages and use absolutely everything. Nothing goes to waste. But you do have to think about what you're doing. ("Think" ... An activity that usually happens when the TV is not on.)
It's true that there are a few things at CostCo that actually do have higher prices. But it's because they keep the quality higher. (Their "Kirkland" house brand has reliably high quality, for example. Just the opposite of Walmart's house brand.)
The article failed to point out how great the meats in the butcher area are. It is difficult to find a better steak or rib!
Also the Costco branded items are terrific. Of course Costco doesn't make them but they do ensure that if their name is on the product that the product is superior.
For all those new shoppers make sure your first purchase is a vacuum sealing device so you divy up the products into appropriate sizes for your household.
I shop at Costco. Buy non-perishables in bulk does not promote waste! I do wish their meat quality was better. Love their wine selection and prices.
BUT MOST OF ALL I LOVE THAT THEY PAY THEIR WORKERS REASONABLY AND DON'T PLAY GAMES LIMITING THEIR HOURS TO DENY INSURANCE COVERAGE AS SAM'S DOES.
I joined Costco to buy an LG TV that they had on sale for an amazing price last year... it was worth the $50 membership fee. I had a hard time deciding if I wanted to renew the membership this year, though... but I think there are enough items there for prices that are So much lower than the regular stores, that I'll still save some money even as a single person.
Costco is also wonderful for people who don't have health insurance (or who have insurance, but it doesn't cover certain medications). You don't need to be a member to use the pharmacy (or the lovely snack bar!), and their prices are the lowest you'll find anywhere. Everyone is very nice and friendly, and I plan to purchase a membership when I get some money. Hell, just the savings on razor cartridges will pay for the membership!
Just another era in retail everything for nothing. A distribution miracle and bulk power purchasing. Limited choice for lower prices a good deal but you need discipline to really spend less. Each of these bulk discount stores offer what their buyers purchase and what moves off the shelf. So each offers different items and choices.
With technology, inventory control and time on the shelf is really deciding what you are offered on the store shelves. That is, what does not move will not be available in your store. If suppliers can not display their product you can not purchase that product. So their will be fewer and fewer choices as the suppliers disappear and the shelves will offer fewer choices. Everyone will be purchasing the same product at ever increasing prices. Interesting dilemma. Will manufactures survive or will they also be forced into making only the products that best move from store shelves. I know I have to shop more online to really understand what is available in this new market place. I like you struggle to eat well but to eat inexpensively.
We are big fans of Costco! I am thrilled to be close to one in Augusta at the moment. We used to belong to Sam's Club but I was never a fan of Wal-mart so we quit a few years ago. Costco is rated highly for good buys in the electronics departments. We bought our last 2 TV's there. The salesmen know their stuff and the return policy is the very best around. I love their food selection, much better, more quality than Sam's Club in my opinion, more organics to choose from. Clothes are better. I bought eyeglasses there and they were great.(Sick that I lost those) We shop there all the time. As a concerned shopper it matters to me that Costco treats their employees well, benefits, pay, etc. It matters that Costco employees are paid enough to not have to go on the public dole like the employees of other cheap warehouses. I cannot shop at Walmart, I don't like how that whole corporation works and yet pays spit to it's employees. Years ago Walmart was teaching its employees in the break room how to go on state aid in CA! The end result is tax-payers have to pick up what Walmart won't pay. Costgo employees are happier because they are treated better and that speaks volumes to me and my family. We just feel better shopping there- Community does matter...And the end of year rebate is great : )
Yeah. I just did the math on my rebate... just the rebate and the savings on the ATM fees that the regular gas stations charge, paid my whole membership fee this year. So I'm at break-even before I even go inside - and that's assuming the gas is the same price as elsewhere, which it usually is slightly cheaper as well. And I'm a union member (through my job) - in the same union as the local Costco employees. (No, they are not UFCW like the grocery stores!) I can tell you - they're usually the most upbeat people at the union events.
Been a Costco shopper for 20+ years. I am amazed that so many people seem to think buying in bulk leads to waste.
Maybe it people's life styles that lead to waste. We buy only the items we use and have never had an issue with spoilage or waste because of the quantity. I have observed through life that many people buy items "one at a time" only when they need them regardless of the price and generally way overpay.
Simply maintaining a shopping list and some sort of schedule to shop does allow for very large saving it you pay attention and shop wisely.
I love Costco but have fewer shopping needs these days so only go once a month. Their quality is much better than a lot of places and is absolutely guaranteed......customer service cannot be beat anywhere. Their meat is excellent and frozen chicken breasts are all one same size serving....no scrap pieces....eggs are larger, etc. Bakery has very good prices and the produce is always fresh. I use their coupon book when I can and buy things in bulk that I won't have to run to the neighborhood grocery for when I run out...soaps, TP and things that are just handy....Campbell's soup, spices, pasta, etc. Gas is cheapest around and not cut rate stuff plus I pick up all my prescriptions there. Have never once been overcharged and when they get really busy, they open more checkstands!
Also, some other very things about Costco
1. Costco online has a lot of items that are not in the store, Esp. electronics, beds ect.
2. the marriage they have with auto companies, you can purchase a car using your Costco membership and save a bundle.
3. Auto/Home/ Life insurance discounts
4. Carpeting
5. Cabinets (kitchen and Bath)
6. Eyeglasses/Contacts
7. Prescription drugs
8. business services even CC processing for small business owners.
OK, I will stop, but the list of things that are not an overindulgence is LONG...
I have a Costco about 3 miles from my place and am there at lease every other week.
My sister even ordered the flowers for her wedding.
If this were a Wal-Mart or Sams Club article it would be full of people saying "Wal-Marts ruining our local economy" "they took our jobs" etc. Where are the people crying about Costco? Both big warehouse stores, closed local businesses.
Difference is Costco has a reputation of treating it's employees VERY well. People who work at Costco by and large love the company.
Costco doesn't run out anyone. The niche they serve is very specific and does not impact mom & pop shops unless maybe mom & pop are selling tires.
But I take your meaning. In some areas you are probably correct such as the local supermarket.
Ummmm ... We're big supporters of local business but we still shop at CostCo.
* We buy organic (CERTIFIED organic) veggies from a local grower and lots of other stuff from a weekly farmer's market. Yeah ... they charge a LOT more but there really is a huge difference with locally grown, fresh, seasonal fruits and veggies.
* For everyday items that we don't buy in bulk, we shop at the local grocery just down the street and save gas.
There's not that much overlap between what locals sell and what CostCo sells and we enjoy seeing our friends while shopping. It's a completely new world and you can't bring back the old time main street. It's gone. But you can find new ways to maintain a local focus. Have you volunteered for your community lately?
@Porter Rockwell "Have youvolunteered for your community lately?" I do more in 1 day then you do in a month to contribute to the world. So let me ask you this, what have you done today to contribute to society?
Ah c'mon! Let's both just whip 'em out on a table and measure!!
I could launch into a list if I cared to ... but I won't.
* Nobody has any way of verifying anything.
* I volunteer for my community for the reward of doing it, not so I can impress you.
I LOVE my community because I get so much back from it and I'm not going to cheapen that by discussing it with you.
You're the one that came off snide with the "Have you volunteered for your community lately" comment and pointed it towards me.
If you volunteer for the reward, then why do you go online bragging about it?
Our family loves Costco. The secret to not overspending is to KNOW YOUR PRICES and go with a list! If I can shop for items on sale at another retailer and beat their prices, I do that; therefore I don't often buy canned goods or soft drinks at Costco. However, I can honestly say that every Kirkland Brand product bought was well-liked and a good value. I used to live a couple of miles from Costco in Utah, but now I have to drive about an hour. It's worth it for once-a-month stock ups on things I know I will use. Bakery, meat, and some dairy and produce items can be frozen, so there is no waste. And I have taken advantage of a few "surprise" finds - brand-name shorts for $16 that ran $50+ at dept store and a leather jacket for $50 that ran $150 at dept store. There is no risk in making Costco purchases, as they have hands-down THE best return policy I have ever encountered. (they can even look up your transaction if you can't find your receipt). Money back, no questions, for any reason, and it can be months later. I have even returned produce that was cut and found to be tasteless and they not only refunded my money but informed me that others had brought back the same item! There's a reason that Consumer Reports ranked them at the top of all-around customer satisfaction.
Costco, and for that matter any warehouse like BJ's or Sam's, is fine for certain aspect of your grocery shopping. It is this idea that people go crazy shopping there, that sends shiver through my spine. I agree that people end up buying much more than they would if not in a warehouse. The savings is only in mind for these crazy shoppers. The amount they save in price, they overspent much more than that in buying too much. Most of the time, those over bought items either end up in garbage or end-up in their body as excessive eating. Obviously when you calculate the side-effects of that overeating and over-consuming, you will find that a warehouse member might end up spending much more than what they might have spent if not given an intensive to buy too much. Not only that, these people spend hours in long lines even when they only might have wanted to buy is milk and cheese.
I have tried both (COSTCO and BJs) and after tracking our shopping and eating habits over a long time, I have found that, my grocery bill went way down by using warehouse only for very few selected items that cannot be over-consumed (toilet paper, OTC medicines, small juice boxes that are used for kids lunch packing, milk and cereal). For rest of the items, I go to Shop-Rite that always have many items on sale (changing weekly). The interesting part is that these items are much cheaper at ShopRite than in a warehouse and I do not even have to buy 3 times than I need. I save tons of money by buying only right amount and that too at the cheaper price. Another good part is that warehouse generally close at 9. ShopRite is open until midnight. The time spent at checkout is so minimal 'cause they have express lanes.
Even with all that said, warehouses have their place as long as we use it wisely instead of going crazy just because it is a bit cheaper than other shops.