Yesterday’s post elicited a comment from a reader who wondered if it’s worth joining Costco because their prices aren’t always the cheapest and they offer a limited selection of merchandise. We have been Costco members for more than 10 years now and looking into Microsoft Money reports, we have spent more than two-and-a-half times at Costco than at the next highest retailer. Our purchases at Costco run the entire gamut – a furnace, a flat-screen TV, a bar fridge, automobile tires, furniture, diapers, over-the-counter medicines, groceries like milk, butter, olive oil etc.

The main reason to shop at Costco is the price – they simply have the best price on many of the items that we regularly buy and if you stock up on essentials like laundry detergent, soap, tooth paste and razor blades when they give out coupons, their prices are almost unbeatable. It is not simply anecdotal reports that bear out their low prices. A quick perusal of the financial reports for Costco and its competitors bears this out. Costco’s gross margins (net sales – merchandise costs / net sales) at 12% are lower than Wal-Mart’s 24% and Home Depot’s 34%.

Despite a regular membership that costs $55, shopping at Costco is likely to save money for most people. In fact, we have an executive membership that costs $100 and provides 2% cash back on most purchases. We shop enough that we’ve been getting back the entire membership fee for the past couple of years.

Another reason we really like Costco is their generous return policy. It’s true that they tightened up their policy on computers and electronics to 90 days but that’s still very generous compared to speciality electronics stores. We’ve bought books that remained unopened for months and didn’t have a problem returning them for a full credit.

It is true that Costco has a limited selection. If you prefer Pampers and loathe Huggies, you’re out of luck as Costco only carries the latter. But, we never found this to be a limitation and simply buy the brand or model we like at other retailers. In my opinion, for our household shopping, there are only two minor disadvantages to Costco: (1) As Costco carries many items for a very limited time, we tend to pick up goods that we really didn’t intend to buy. Costco shoppers should also guard against buying something, especially perishables, just because it is on sale. (2) The two local stores that we frequent are extremely busy on weekends and the aisles are packed with shopping carts. Still, the checkout lines move fast unlike other retailers like Wal-Mart.

This article has 100 comments

  1. Like every answer – It depends 🙂

    What works for one may not work for everyone

    I agree that Costco has its benefits, price errors, great return policy, that I occasionally took advantage of. Their staff were friendly as well

    But Costco may not be for everyone because:
    1. It is too far, you have to a lot just to even out the gas bill
    2. You have to buy a lot, usually.
    3. I find that, if one looks and be patient, other retail stores can beat/match Costco. e.g. electronics you wait for FS/BB, grocery you have your Sobeys/Loblaws/No Frills/Price Chopper/Food Basics…. then there’s Cdn. Tire and Wal-Mart

    Don’t forget, you get $25 Gift Certificate now for the $55 Gold membership signup, making it more attractive

  2. I can cite many single visits where I saved more than the cost of membership. Beef Tenderloin – $11.99 (IIRC), selling at $18.99 at the local butcher. Whole piece is about 6-7 lbs.
    To be sure, there are some items that on sale at CVS or the supermarket, with coupons, can be cheaper, it’s not every single item, but all in all, I’ll keep my membership.

  3. The Exective membership is actually a ‘no lose’ because they’ll spot you the difference if it is not worth your while. I think we’ll probably get about $150 – $300 back in one year over an above the membership price premium.

    I would estimate that shopping at Costco probably saves us over $1,000 per year on essentials. The membership cost is a drop in the bucket. You can save the membership cost alone by buying Kirkland Signature diapers instead of Pampers or Huggies.

    • What do you mean? Costco will give you your additional membership fee back if executive doesn’t work out?

      • Canadian Capitalist

        @Kelly: Last I checked Costco was still offering to refund the difference if the Executive membership didn’t work out. Our family gets back enough that we’ve never had to take up Costco on the offer.

  4. Thanks everyone for the comments, especially C.C. It looks like it worth a 3rd try at CostCo. As Jerry put it, the location is not really convenient, but return policy is certainly great if you can keep the receipt (or do you need the receipt?). Great thanks!

  5. I hate to be a stick in the mud…

    “flat-screen TV, a bar fridge, automobile tires, furniture…”

    Wouldn’t it be cheaper to not buy that TV in the first place? A 2nd fridge adds to your annual electricity costs. The tires, I concede are necessary.

    The furniture. I find that furniture can be had for free (or close to it) used, or a floor model at a furniture gallery can be a great deal.

    However, for the necessities, if the savings vs ANY other retailer are greater than the cost of membership, then go for it!

  6. I tend to agree with Jerry, it depends. I’m single, so I don’t generally need the huge packs of everything. I also find that their produce and food in general is not a great deal, in fact it is often more expensive than in supermarkets, especially the produce. I would tend not to buy meat (especially hamburger) there as there have been too many recalls compared to regular supermarkets for my liking. Go here and search for costco.

    They do have a good return policy. But the checkout lines can be torturous and you may have to drive a long way to get there.

  7. Many people forget that Costco specializes in making you buy more (and maybe eat more as well). Not just by making you buy things in larger quantities but by tempting you to buy things you wouldn’t normally buy, through lower prices.

    The problem with all of us is we keep track of “how much we save.” But how much people save at retailers is a meaningless measure. If I tell you that I saved a $1000 last year on car insurance last year would you be impressed? Maybe, until I tell you that I had 5 accidents and my insurance now costs $20,000 per year. If I tell you I saved 50% on bell peppers at the grocery store, you might be impressed, until I tell you that I purchased them at a store that charges $10/pound. It is easy for CC to know how much he “saved” in one year by shopping at Costco, compared to buying the exact same basket of goods at other retailers, but difficult to go back in time and see if he actually would have purchased the same basket or not.

    What we should look at is how much we spend. For example, how much you spent on groceries in a given year (at Costco) compared to another year (at Loblaw’s) or how much you spent on groceries in a given year compared to other Canadians. Even these measures are not perfect, but it shifts the focus away from how much was “saved” to how much was actually spent.

    moneygardener pointed out that they saved ~$1,000 on “essentials.” The distinction is important as saving money on an essential is real savings. And without a doubt diapers are essentials. I can’t speak for moneygardener, but as for myself, I know if I go to Costco to get Kirkland diapers I’m going to come home with a massive bag of Que Pasa chips, massive buckets of Que Pasa fresh salsa (I’m addicted to it), a big box of SunRipe fruit bars (also addicted to these), and a box of Nature’s Valley’s granola bars.

    • @Dave – Your comment is phenomenal! We really should shift our focus from ‘how much did I save’ to ‘how much did I spend’. I find Costco does make you spend more because you see the potential savings everywhere!

      • I do not shop at costco but it has been my experience that people who compare savings at costco always compare it against the most expensive places the shop, places that i would never shop. When we compare what they spend every month compared to what we spend every month their spending almost twice as much.

  8. Costco is wonderful for most things, but not for everything, for instance computers. Then again here in Calgary we have Memory Express.

    The wonderful thing about Costco is usually what they sell is great quality. I wouldn’t consider buying tires anywhere else. For a few dollars more than cheap no name tires, you can get speed rated name brand tires. They have great deals in veggies and they have awesome frozen items, like the huge bag of Chimichangas for about $10.50.

  9. Dave raises some good points about tempting you to buy thing that you don’t normally buy through lower prices. I would agree here although it is not difficult to control the temptation. I would argue that when we ‘need’ or ‘want’ something that we would have bought elsewhere in the past, like a flat screen TV or sort running socks…we now always turn to Costco because we just know that they’ll have the best quality product at the best price. Costco are industry leaders not because of price but because of quality. They are attracting my money that I would have spent elsewhere at retailers that take in more margin dollars. That is real savings as long as you don’t splurge on items that you would not have normally bought just because of low prices. This of course is impossible to measure but it is hard to make a case that I don’t save money when I buy the following items there regularly:

    Toilet Paper
    Paper Towel
    Tooth Paste
    Granola Bars
    Canned Salmon
    Baby Wipes
    Dog Food
    Dish Washing Liquid
    Laundery Detergent
    Fabric Softener
    Bottled Water

    All of these items would be bought anyway at local grocery stores in lesser quantities for more money per unit. The only difference is that I’d be buying them more often and paying more per unit and likely getting an inferior product.

  10. Canadian Capitalist

    Jerry: I agree that it depends. If our local Costco was 50 kms away, I’d stay away as well.

    Joe, Jim: We don’t buy meat but it’s good to know that Costco’s meat prices are lower as well. And not so good that their meat is more susceptible to recalls.

    MG: Good point that if you don’t earn at least $45 in rebates (the difference between the executive and regular membership), Costco refunds the difference.

    Jennie: You don’t have to keep the receipt for a refund. They are really good about it. Still, if it’s very far, I’d probably stay away as well.

    Cash Canuck: I didn’t say a flat-screen TV is a necessity. Simply that it’s one of the things we purchased at Costco.

    Dave: It’s a good point and I’ve noted that Costco is especially good at getting us to buy what’s not on our list. They even call it “treasure hunting”. However, impulse buying is a problem at any retailer. I’ve once dropped into a Future Shop to buy DVD blanks and walked out with a “great deal” on a laptop. So, it’s perhaps a bigger problem at Costco but not specific to them. We have to watch out for spending anywhere we shop.

    Dan: I agree that Costco tends to be of higher quality. We don’t buy computers there either and only rarely electronics.

  11. My wife and I always justified our costco membership on the basis that the savings on diapers alone paid for the cost of the membership. We do shop with a list and a budget so we don’t get out of hand in there.

    Like anything else, you need to know what the competition is charging to know whether you’re getting a deal. I find paper goods at costco (toilet paper, paper towels) are not worth buying unless there’s a coupon or instant rebate.

    There’s also a website, that shows you the costco coupons for that week (Canada only). We always check it to see what’s on sale.

  12. I have avoided a membership because I don’t think I’d go there enough. It’s out of the way for me, as I don’t have a car. Though I only live in Halifax, I don’t really feel like taking a few hours out of my day (with bus travel) just to buy a giant package of toilet paper and then awkwardly carry it home on the bus. However, I am interested in their picture framing services. Oh well.

  13. Canadian Capitalist

    Chuck: Thanks for the website. I didn’t know about it and it’s now bookmarked.

    I always pick up toilet paper, paper towels and facial tissue with a coupon at Costco. We also don’t buy produce there – Produce Depot (a local grocery store) has better prices and you can buy smaller quantities.

    Melissa: Without a car, I wouldn’t even consider Costco membership.

    • Sylvia Furman

      Canadian Capitalist, you mentioned Produce Depot. I LOVE Produce Depot. The quality of their produce and the prices beat anything I’ve seen here in Ottawa. Melons at Loblaws? Tasteless and unripe, while at PD, juicy and delicious. I wish there were more PD stores, but since I have moved closer to one, I am totally happy. I don’t have a Costco membership yet because I think the annual membership costs are way out of line. CF MEC, with a lifetime membership cost of $5!

  14. I guess it depends. I’ve never seen the value in a membership since I was always a single guy. Even as a couple, I think it’s borderline when you include the distance and time spent navigating the parking lot. Certainly with children, it probably pays for itself many times over.

    I know a lot of people who buy their tires at Costco. Prices seem to be good, but getting in is a nightmare as they don’t take appointments? I have purchased my tires and wheels from tire rack in the states ( Even with shipping and duties, they were substantially cheaper than any local tire store. Probably better for the performance enthusiast, but there are savings for a basic winter wheel and tire package for the minivan as well. If you just get the tires, you’ll have to bring them to a local store to mount and balance (costs about $20-25 a wheel). If you get a wheel and tire package, they’re already mounted and balanced and it takes 45 mins to do it in your garage (the tools are already in your car).

  15. Disclosure note 😉 : I’ve got an Executive membership at Costco.

    While I agree that on average, prices at Costco tend to be better than at many other retailers, I disagree that is is THE place to go for cheap things. I don’t feel the analyses that show Costco has lower margins than say Walmart is totally relevant to finding the best price. All this means is that Costco has a consistent margin on most of its products, where as Walmart marks some items up a lot, while others less so.

    Sales, are the way to go, especially for staples (toilet paper etc). Every retailer will at one point offer items cheaper than at Costco (even after coupon), you just have to be patient, keep an eye out on flyers and like shopping for value stocks, pull the trigger only when the price is right!

    I agree with people that shopping at Costco triggers the ultimate ‘lets buy that too!’ reflex. Next time you are waiting in line, look at all the crap that people have in their carts. For me personally, thank goodness I’m not patient enough to wait most of the time.

  16. While a professional shopper may occassionally beat Costco price, their quality of meat and produce in particular is hard to find elsewhere. I live in a remote area and produce purchased at Costco will last at least a week longer than items purchased at another store. The produce is always first quality as is the meat. If you are careful in what you purchase in quantity, even a single person household such as mine can benefit from the Costco shopping habit. As for the membership cost? One set of tires which will save from $100-200 over competitors will pay for the membership. Costco also takes excellent care of its employees and you can expect dealing with motivated, intelligent and customer focused employees at Costco. Viva Costco

  17. I will admit that I have never been in a Costco store. Given my poor impulse control at stores like FutureShop, Chapters etc I think that this may be a good thing. What do they offer besides the above listed tires, toilet paper, diapers, meat and produce? Could I buy DVDs or iPods there? Is this the store that Loblaws is going after with its ‘bus stop in the store’ type of commercials?

  18. when your mom pays your annual dues as an extension of her membership, despite the fact that you’re nearly 30 years old, i can assure you it’s worth it… 🙂

  19. Canadian Capitalist

    noblelea: I recently purchased tires at Costco for $416 for a set of 4 (including taxes) and I already had the wheels. The cheapest at tirerack is $350. So it seems to be an cheaper option.

    Sampson, Gary, GIV: Good points.

    Billy: Costco does carry DVDs, iPods, books etc. They have very good prices on books but their DVD prices seems comparable to BestBuy but they don’t have the same extensive selection.

  20. Cash Instinct

    Why Costco would give money back to people if they do not get enough $ back from the 100$ membership card? Because they know that people taking the card will spend much more than they would have otherwise.

    People at Costco are often buying more than they intended to. It is easy to get a bigger bill with $10 items everywhere (big format, good price, let’s buy it).

    It might be a deal if you can control yourself, but if you can’t, even paying less is money out of the pocket.

  21. We enjoy an Executive Membership at Costco and had a couple of comments:
    1 ) The quality of the meat/seafood beats the grocery chains HANDS DOWN. Even if the price isn’t better (though it usually is), the quality is much higher. I’d rather pay for chicken breast that tastes good rather than bleached.
    (That being said, we’ve bought beef/pork from a local butcher by the Freezer-full for the last couple of years, but we still top up our chicken and salmon at Costco and swear by the quality of the other meats.)
    2 ) You can sometimes find sales on products at the grocery store that beat the Costco prices, but the “regular” prices at Costco are generally better than “regular” grocery prices. Sometimes, you can’t wait for a sale – so you head to Costco.
    3 ) We get a lot of entertainment value out of going to Costco. The kids love getting “treats” – the samples. We love to browse. That being said, it’s hard to walk out of there without spending at least $100.

  22. One disadvantage of Costco is it doesn’t take Visa or Mastercard. I have the Starwood Preferred Guest MasterCard with MBNA (pound for pound, the best credit card out there in terms of points and rebates) and even though I have a Costco membership, i don’t frequent it as often as I should (we don’t have any kids yet and I tend not to buy things unless I have to, needs vs. wants)

  23. canabiz – you can buy Costco cash cards through their website using whatever credit card you like – it takes a little more effort but nonetheless is very feasible

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  25. At this point we would have a hard time functioning without Costco. BUT, we are small business owners AND own a deep freeze. For our business, we buy all our envelopes (for instance) through Costco as we can buy them cheaper than our printer can buy them from the paper wholesaler. For our personal shopping, you can buy products cheaper elsewhere if this week you want to buy your Charmin toilet paper on a big sale from Super Store, your Kraft Ranch Dressing on sale at Sobeys, etc. But, if you don’t want to do that, and want to buy name brands instead of no-name products, you can’t beat Costco across the board. For meat products, we are retired farmers and always had our own beef animals butchered. Now, we only buy our meat from Costco. We would prefer they had AA beef instead of AAA as we find it fatty, but we pick and choose. I think their meat is way better than the alternatives. But, we buy the full loins (pork or beef) and cut them into steaks or roasts at home into whatever size we want. It is cheaper, but you have to be prepared to put out $150 or more for meat. But that will last a long time – as long as you have a freezer.

    And the big saving I found was when I purchased hearing aids. The amount I saved will pay for my membership a long, long time.

  26. We shop at Costco because we trust them. They offer excellent quality at reasonable prices. It’s hard to go wrong with a purchase and if you do, they’re great at giving refunds. We upgraded to an Executive Membership a few years ago and have a Costco American Express card.

    If you don’t have a family, the product sizes are probably too big. Not sure what’s there? Visit with a friend.

    You never know what you’ll find or how long it will last. That’s part of the appeal but you do need self-control. Comment #10 refers to the Treasure Hunt ( title of a fascinating book by Michael Silverstein), which I describe further here. The book uses Costco as an example.

    When we visit the US, we drop by a Costco if possible. They have different products and prices can be lower. In the US, you can even buy gasoline (87 or 93 octane) and cars.

  27. I noticed a new service offered by Costco called Concierge Service, available 24 hrs for free technical support on the products they sell. Also, Costco will now extend the manufacturer’s warranty to 2 years for TVs, projectors and computers.

  28. I was skeptical, but i gave them a second chance and i am loving it!

    PS. you can cancel your membership at anytime during the year and get the full value refunded, not prorated!

    Give it a shot.

    PPS, I also live and work near a costco!


  29. Been a Costco member since their Price Club days,so at least a decade?I am single,but have learned to save money buying the “essentials” others here have also found savings with.

    I find the Costco price for “essentials” are more often then not comparable,or less when combined with a Costco coupon to the “sale” price at most retailers.

    Verify prices of items before buying at any retailer,rebates can make a difference. Costco will help you save in the overall house hold budget.

    Wished Costco would bring more of their gas stations to Canada.

    Sample of savings for me:

    Costco Dewalt drill set: 18V drill,2 batteries,various drill bits for about $200
    Home Depot, the battery alone was about $90
    [Saab] synthetic oil change,about $40 @Costco;the dealership about $80
    Glass Lock food storage container set of 5,$19 Costco
    Glass Lock food storage @ Canadian Tire,$10 for ONE large container
    National brand 12 roll toilet tissue, sale price $8.99,Zellers
    National Brand,36? rolls, around $18.99,Costco

    Definitely get the cost of my executive membership back each year.

  30. I think Costco membership is just a way to tie the subscriber to come back. When you compare the prices with other places you’ll find comparable prices and quality. Plus with the way they package their merchandise in bigger quantities, you end buying more than you need and paying more, although it looks more attractive by buying more for discount price, yet this means you bought more than what you need and therefore spent more.

  31. Are Costco ‘store’ prices just the same as their ‘online’ prices? I don’t have a car and there are some heavy items I want to buy there… and there’s no delivery charge!

    If prices are the same online, there’s no temptation to buy more than you need by going to the store!

  32. Peoples tend to trust too much Costco and they believe they always have the best prices on everything they buy. They thought about buying a TV but didn’t make the act yet until they see a nice one, well presented at Costco. They are sure they cannot get a better deal somewhere else so they buy it and ignore the fact that most of the electronics are actually more expensive than in a store like Future Shop, Best Buy or even Walmart. They also ignore the fact that most of the electronics are last year’s models, discontinued models that have been sold for much less at another store a few months ago, in a clearance sale.

    I agree that they have good prices on books, meat, diapers but after comparing with other grocery stores, supermarkets I’m used to go to, it is not convincing enough for me so I decided not to renew my membership.

    In my opinion, Costco is good for peoples that have a big family, a small business or that don’t have time to search for good deals somewhere else.

    Costco has your confidence so they can sell you anything unless you are a price watcher like me.

    Happy Savings!!

  33. Well, as an employee of Costco, they make 85% of earnings on membership, the rest is items.
    At a certain point in time, they must clear items at bellow cost for new items.
    Company’s actually pay the space the items are placed in, like a small rent with a time limit.
    So, is it worth it? Yes if you have a large family, business or if you salvage.
    Salvaging is very profitable there, that’s when they unload pallets of items at bellow cost. Mostly end up at small retailers or eBay.

  34. Six years after canceling my membership I decided to give Costco another try; I soon realized it was a huge mistake. I say this for the following reasons:

    * Waiting lines. I found a book that I liked during my lunch hour. I turned the corner and saw only 3 tills open with a dozen customers in each line with half to full carts. Not willing to wait 20 minutes in line to buy at $10 book. It gets much worse during their busy hours.

    *Limited selection. I saw a bed I really liked for my daughter but it only came in dark brown that Costco likes so much. You notice the difference when you browse the American website – seem to have a much better selection.

    *Value. Most of the items can be found elsewhere at comparable or cheaper prices. It’s a matter of shopping around – especially online.

    *Distance. Our Costco is at the other end of town for us – it’s an easy 20 minute drive one way. With gas prices being what they are today…

    *Parking. On a busy day – good luck!

    *Crowds. Trying to maneuver carts through cramped aisles is frustrating.

    They do have some good deals on specific items at specific times but not enough to justify the membership fee.

  35. Disposable diapers a necessity? How about cloth? Think of the money you save on a one time purchase versus weekly . Also disposable diapers will be in the landfill long after the child who soiled them has died and gone.Does CostCo sell cloth diapers?

    • Yes, they sold Grovia packages for awhile and they carry Bummis liners all the time but you have to order through the website.

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  37. My answer is simple…only if you buy in bulk and need it.

    In response to Janina’s reply, the online Costco tacts on an extra fee which is like a percentage of a membership fee. Better to go off to a brick and mortar Costco lol.

  38. I would apply a simple rule of thumb to Membership (or Executive membership) at Costco: It makes sense if you have a middle class or higher income. This realization comes from personal experience:
    When I was still a student, and my wife’s modest income supported us both, we were given a free one year membership. The verdict at the end of that year was a thumbs down. When your cash flow is a limiting factor, you cannot effectively take advantage of what Costco offers. Now we have a much higher income, a family, and spend much more on the types of things Costco offers. Membership with the Executive cash back option turns out to be a big fiscal advantage now.

  39. I dont think I will renew my costco membership next spring because of the following reasons:

    1) Starting this fall, they will charge $6 per tire to take off your summer tires and put on the winter tires. It was free before, as long as you bought the tires from them, not anymore. This benefit WAS the only reason that I kept my membership. Now, I have bought the impact gun and sockets to install the tires myself, and that will save me time and over $100 a year for 2 cars.

    2) One of the business strategies of costco is to sell in bulk or in large package (30 double AA batteries, 3 bottles of pasta saurce, etc.). Unless, you have a big family with lots of young kids and babies, e.g., diapers, it is not worth the membership fee.

    3) If you look at the weekly flyers from local stores, you will find better prices than those in costco.

    4) There are certain items in costco that I used to buy (nuts and salmon), but their prices have gone up over 30% in the past 3 yrs.

  40. The business model of costco is simple:
    – bulk sale
    – no credit (cash or bank debit only)
    – no salesman
    – no fancy display

    Its target customer is a big family with good purchasing power. If u have a small family, it is not for you.

  41. For those interested in cheap diapers, have you tried diaper city in Toronto?

    120 diapers for around 20$ CAD. It’s much cheaper than Costco/ Walmart.

    However, I did buy a box from Walmart once when the price was on sale, and only then was cheaper than Diaper City.

  42. Having been a ‘member’ (clean gross for Costco, dues, or covercharge essentially…) for many years, I’m not renewing. Costco is not the ‘value’ it once was. Anything I ‘need’ I can get at a Walmart Supercenter, Canadian Superstore or even a Canadian Tire at better prices in most cases. The household basics prices are actually higher at Costco (before even adding the yearly dues and poor shopping experience while recycling for them in the end) than other retailers. Factor in cash only or tied-selling via the AMEX only policy (more debt-service ratings anyone?) and you haven’t got much to brag about. Yes, some items are national brands but these same national brands MAKE generic brands available elsewhere or even for Costco itself. We also do 1/2 of Costco’s recycling free of charge (yay! boxes, where’s my fee?), we cannot use our OWN reward cards or VISA, MC or whatever, the hours are bad (mentioned), parking sucks, no plastic bag option, no carryout option and last, the other membership services are generally MORE expensive (and useless) than sourcing oneself (ever price eyeglasses, tires and their reno stuff??? thumbs DOWN). Tell them at checkout WHY they only take AMEX and they can’t admit they just have a better transaction rate deal over VISA & MC and AMEX pays THEM for everyone who applies, even if NOT approved. They just say something like “oh, applying is EASY for our AMEX card blah, blah…). Watch the blank stare when you ask them if it has to do with rates, agreements or generally just controlling the consumer. They’ll walk away after that. I won’t get another Costco membership but I’m okay with everyone else staying with Costco because the world needs sheep.

  43. We shop at Costco and will keep the membership. We really like the quality of the merchandise and meat there. The meat is ten times better than competitive stores and we just cannot find that quality anywhere else. People need a variety and while we don’t do all our shopping at Costco our purchases are bigger because of the bulk factor. Not all of the items there appeal to me but I have not had to buy computer paper in years and the toilet paper is far superior to other brands. I get rather tired of the multitude of choices in a Walmart where there is never any help to find anything and the sheer size makes me dizzy not to mention that they really are not the cheapest place to shop….Nor do I like to sort through racks and racks of clothing to find the Costco jeans and pants I buy regularly for 15.99 and last a good long time. Far better than other stores where yo might pay 2.-3.00 less but then have them last only five washings.
    I am confused by the tactical pricing of vegetables and fruit at the major chains…One day 99 cents and the next day 2.49 for a pound of grapes…give me a break.
    I do like the fact that Costco weeds out a lot of substandard products that might be cheaper but undesirable….But we all need some variety and Costco does that for me well.

  44. Disclosure: have an exec membership. If we don’t buy enough to generate a cashback cheque at the end of year, they pay for the difference for what we paid. (However, you must remember that you’ve forked out the exec membership up front and that they’ve paid you back after 1 yr. Question: can you get enough interest out of $50 for 1 yr to make up for the upfront payment?)

    agreed with many points both pro and con

    -When shopping, we always have a calculator and work the per unit out vs external stores such as Real Canadian Superstore (which is a good comparable to calculate if Costco is good for you or not).

    -When shopping, try to eat before shopping. It will cut down on your food impulses.

    -Before shopping, take a grocery list of items you need, but still review for price comparison as above

    -Understand that what they sell now, may not be there next week. Also different store locations can sell different items with others not having it in stock (within limits) as it tends to totally disappear all together.

    -Got good credit rating? Get Amex. Partner has Amex Costco Cashback while I have Airmiles. Either one works.

    -Often when I buy pork, it’s in a flat that’s waaaaaaaay too much for the 2 of us so I give it to my mom.
    -Sometimes sharing the cost of items among friends works out in the best interest for all.

    -When paying for items, only the cardholder(s) can pay. Your friends cannot. So work it out between yourselves before/after purchasing.

    -Costco is a “factory Outlet” or bulk warehouse retailer. It’s not for the small, occasional item shopper.

  45. I buy very few things at costco but I think there is a lot of value to be had if you control what you buy. I see people in there with an absolutely insane amount of food that in my opinion is full of superfluous and unnecessary items, and are therefore basically wasting money by over spending. I buy 2kg bricks of cheese, bulk AAA meat, frozen vegetables, spagetti sauce, cans of mushrooms/beans/chilli, bread if I need it, and stuff like detergent or a pair of pants or what have you. I think you can really get a good base of items from Costco but I think shopping there exclusively is only going to have you buying more than you need or really want.

  46. I absolutely love shopping at Costco. Their quality is consistent, their prices are competitive if not cheaper, their selection of products is diverse and not least, their wages to their employees is respectable and liveable.
    Oh, and our local Costco has recently added a gas bar that consistently beats all discount gas bars by two to five cents per litre.
    I am considering by stocks in Costco because I believe with so many positive qualities, it was no where to go but up.
    I am starting to sound like a commercial but I assure you, I am strictly a private customer.

  47. Has anyone tried the auto/home insurance offered to Costso executive members? The quote that they gave us is considerably lower than our existing insurance agency….

  48. Pingback: Another Reason to love Costco | Canadian Capitalist

  49. Pingback: Another Reason to love Costco | MoneySense

  50. I just called Costco on the phone and ask about return policy for a chair I bought 3 years ago.
    And heard my chair is too old for return.
    Guess I was too much exciting about the great costco return policy.
    I should throw out this chair it really hurt my back….
    I never return anything before. I have been their Executive member for over 4 years.

  51. My wife and I love Costco, but we call it the Hundred dollar store. we are Executive members and always get around $80 to $90 back every year. it is worth the $10 – $20 fee to shop there. just look at breakfast cereal only. $5 – $6 for a large box when you’ll pay $6 – $7 for a small box at pricesmart here in Vancouver

  52. Before I got a membership I compared prices to Loblaws and IGA. I actually did an excel spreadsheet (I am a bit of a geek). Here’s what I came up with:

    Eggs at Costco are 5 cents less than at other grocery stores. In my family of 6 we consume 2 to 3 dozen a week, that is between 60 – 90$ a week in savings a year. Just the savings in one product more than makes up for the membership fee.

    Bread is 40 cents less per loaf, we go through 3 loaves a week (sandwiches for lunch, toast, French toast), that makes for over $60 a year.

    Cream is $1 less, we buy one cream a week: $50 savings.

    I could go on and on about yogurt, butter, cheese, tuna, pasta, canned tomatoes, mushroom soup, brown sugar etc. These are all things we use all the time. I stick to my list and get the benefits of being able to buy other things. I just bought my son a swiss army backpack for $28.97 (on sale). The exact same bag at Staples was $70!

    • @rina: Care to share your spreadsheet? I’ve done back-of-the-napkin calculations to figure that we save enough on milk alone every year to justify the price of membership but it would be interesting to see what you found. Thanks.

  53. I think the key to Costco is to stick to your list. My personal rule is not to buy any new or impulse products, unless I’ve tried them at a friend’s house and liked them. I stick to my tried and true items. And yes, it’s definitely worth it. We have a large family, and save a bundle on ski passes, meats & seafood and dry goods and staples like flour, sugar, spices, coffee, tetrapaks, garbage bags, coffee filters and cleaning supplies.

    I would say, though, that the produce is horrible and so is the dairy stuff. It’s cheap, but tasteless. I think it’s been in storage too long.

  54. 3.25% Milk cost less at Wall-Mart.
    Eggs cost less at Wall-Mart and also they are less expensive at Superstore and Giant Tiger.
    I no longer buy Costco meat, because I find better quality at Better butcher (Calgary).
    Much, much better quality.

    The Toilet paper along doesn’t worth renewing my executive membership.
    This year not only I’m not going to renew my membership, but also I am going to request a full refund of the executive fee I paid.

    Pay money for the privilege to spend?
    No, thank you….

  55. Must say I am very concerned with recent experiences. First with their website hosting company partner in Canada where I left in 1 mth. Despite the misleading information on both Costco,and the web hosting company’s websites,in addition to when you do an online search of this company, the assist. Costco buyer,lead buyer felt there was no need for concern,or to visit the relationship. Delivery of an online purchase I was given something like a 4hour window from their courier,contrary to what the Costco website states. The inflexibility by both Costco client care,and their courier was baffling in comparision to couriers who deliver non Costco items to me. Goal’s to get an item off the truck.TRY to work with customer’s availability. Read UPS’s door knocker,they ask you when you will be around.NO guarantee for an exact time,but they aim to deliver around your availability,ie. morning,afternoon.

  56. Just to alert Costco customers to a tactic used by Costco which makes shopping there less and less desireable:

    December 9/2009 KS Pecans, 1.2Kg 9.89 (no coupon)
    July 13/2010 KS Pecans 1.2Kg 11.69 (no coupon)
    December 29/2010 KS Pecans 0.98Kg 14.95 (no coupon)

    An 18% increase over the first 7 months, almost 100% increase over one year! Is the current price competitive? No, because the same quality pecans are available at most supermarkets (e.g. Loblaws) for $6.50/lb (=$13.96 for 0.98Kg).

    This is only one example of the bait and switch tactic used by Costco to entrap the loyal and unwary customer. There are numerous other examples of offering at an initially attractive price and then hiking the price beyond competitve pricing, on the assumption that customers won’t re-check prices in-store.

    I have found that, until mid-2010, only one in five food items at Costco were priced below competitors’ prices, the rest being equal to or greater than the competition. On the last visit, I found only about 10 per cent of the food items worth buying.

    Sure, we’re going to have Costco appointees respond with the “quality” arguement, but I’ve not found the quality of Costco foods to be sufficiently superior to that of the competition to warrant paying even the sme price and getting stuck with a larger package than needed.

  57. We have shopped at Costco since they opened here, we have qn executive card and we have received money back. Their n=meat is excellent the steaks and roasts especially. We don’t but produce because we can’t use the large quantities but things like Orange juice are grea a box of 4 Tropicana lasts a month and is cheaper than an of the chains, cereal also is a great buy the large boxes are easy to store and the price is great. We won’t shop at Wal-Mart because everything they have is from China even the food.

  58. Pingback: Price Check Experiment: Is Costco really worth it? | Squawkfox

  59. Hi,
    I just received my executive membership rebate cheque for the first time, and now I’m considering cancelling the executive membership.

    There are exclusions on the 2% rebates calculation which I didn’t know until today; gas, alcohol & tobacco, optical, auto services and pharmacy products purchased at Costco warehouse are NOT included.

    Even though I spent over $2500 at Costco for the past year but one third of them are for gas purchase & other services, my rebate can’t even cover my upgraded membership. Not worth it in my case, going back to be a gold member.=)

  60. @Kristine,do you have the Costco AMEX that offers a rebate? I do,and wonder if the consumables you listed also don’t qualify for a rebate.I feel everything but alcohol,and tobacco,or “sin items” should qualify for an Executive rebate if anyone at head office in Costco U.S.reads this site. The Amex,and Executive rebates are capped anyways,so give members a break on “normal”home,or business items.

  61. Actually even if you are a single guy, buying razors at Costco will save you and pay for the $55 membership fee.

  62. Re Martin’s comments “…. electronics are actually more expensive than in a store like Future Shop, Best Buy or even Walmart. They also ignore the fact that most of the electronics are last year’s models, discontinued models that have been sold for much less at another store a few months ago …”

    Absolutely INCORRECT Martin … Future Shop and Best buy are notorious for selling old models, case in point is a recent purchase of an HP tablet … FS and BB were selling theirs for $30.00 more than Costco with the “g” network card, where Costco’s was the latest chip set with the much faster “N” card. Also on a recent purchase of Garmin GPS … free lifetime maps model for less than subscription map pricing of same unit at FS & BB. The dog and pop for 2 bucks sure beats the roach cart outside C – Tire. With respect to Walmart, I stopped shopping there years ago … sale items never in stock and their assanine “Limited Time Offer” (WTF – a sale is always limited time) cop out on rainchecks … I happily use the Walmart flyer for price matching at Superstore or Loblaws.

  63. Well there certainly are a lot of people shopping at Costco. Here is a tip for people who do not spend alot but want to get the membership for free, take a friend with you and put their purchases on your card.

    Next important point already mentioned many times – you can not beat Costco’s return policy – no questions asked, they just give you your money back. I bought a bath room rain shower unit, installed it and did not like the way it worked. After 5 months I took it back and got a full refund.

    I also know other people who buy expensive items used them for 10 months and then take the item back and get something new again, once again a great return policy.

    As Micheal noted electonic items at Costco are very good, but I will need to check the return policy since some comments indicate that you may only have 30 to 60 days to return an item.

  64. I shop at Costco regularly for meat for my clients. I do so knowing that on a scale of 1 to 10, 10 being the best, it’s a solid 8 only compared to some of my other suppliers, but it has 4 advantages that can’t be overlooked…

    1..It’s always in stock. I have only had one experience in 6 years where what I wanted wasn’t in stock, and it wasn’t in stock because the truck broke down and would be in the next day, now I always shop the day before, just in case…
    2.. consistent quality, its not 10/10, but as long I can always expect 8/10 all the time, i know how to cook it for my clients, I can’t say that for Loblaws stuff.
    3..Large cuts, or not…I can rarely get full prime ribs or full tenderloins at grocery stores and I can walk in and get them without question 7 days a week. I can also get trimmed goods if i need it then and the price point doesn t break me.
    4.. Cost..their price points are always the same as any other place, which saves me stops, and my time has a cost too.

    Now if only they would adopt an animal welfare program like Whole Foods, THAT would be cool…

  65. My costco membership has been worth every penny but I kinda share with with a few people. Probably not the most legit thing but we all live in the same place and it makes it easy.

  66. Did you know that Costco .ca doesn’t recognize purchases in Mexico? Using my Costco card in Cabo San Lucas for the last 10 years on liquor and small appliances etc for 6 weeks bi annually , I have NEVER seen my 2% back. Is anyone else using their card in Mexico?? How can we correct this?

    I agree with Kristine.

  67. I live ten minutes from a Costco. The gas price averages 5-6 cents less per litre than the posted daily average. I generally save about $3.00 weekly. just the gas savings alone more than offsets the cost of my membership, with the additional in-store savings to boot.

  68. Bought a Bose sound dock and 6 months later it crapped out. Bose said too bad, Costco took it back in heartbeat. Replaced it with a Sony that’s 80% as good and 1/3 the cost.

  69. The simple answer is – NO

    We had always thought that Costco prices were comparable to other “big box” retailers and never got a membership because of the membership fee. Everyone insisted that Costco had unbeatable prices and so, when we received a Costco membership as a gift, we decided to try it. We are very savvy shoppers and so the first thing we did was walk around the entire store and price out our regularly-purchased items. We were disappointed to say the least and could only find three grocery items in the entire store that were cheaper than what we pay elsewhere.

    Their eggs (A 5-dozen case I might add) were $2.54 per dozen. We pay $2.46 at Superstore and don’t have to purchase 5 dozen at once.

    Cranberry Almond Crunch: $8.99 per box (the large box) and $7.99 per box (same size) at Superstore

    Cheese: $1.16 per 100g and you have to buy the giant block to get this price. We pay $1.00 per 100g at Sobeys and can purchase smaller packages.

    Meat: All of the meat was either the same price per kg or more AND Costco’s meat is constantly being recalled.

    Apples: 2.68 per lb vs. 1.97 per lb at Superstore (for the same brand).

    The list goes on and on. You can certainly save on non-grocery-related products, but just because Costco sells groceries in bulk does not mean that the price per unit is cheaper. They just make you think it is by having giant boxes.

    I like that they do have some products that you can’t get elsewhere (yam fries), but it certainly isn’t worth it for us. Add to the fact that you can’t use manufacturer coupons (or can only use one per giant pack vs. using several for several smaller packs) and it is definitely more expensive. They also never have sales like other retailers, which adds up quickly. Take, for instance, the purchase of formula: Superstore has Similac on regularly for $24.99 a can. Costco had a three-pack (same-size cans) for $72.99 – BUT, Superstore regularly has a sale price of $16.00 a can PLUS I have several $5.00 Similac coupons. Therefore, 3 cans at Costco with ONE coupon (if they even allow it) is $67.99 but at Superstore on sale with my 3 coupons and 3 cans comes to $33.00 SAVING 34.99.

    All in all, a savvy shopper can see that it is not worth it (for regular groceries) and I would rather put my savings towards my children’s education.

  70. Bridgestone Blizzak tires.Same set would’ve cost me about $150 more if I ordered online from a discount tire shop,$795 before shipping,installation,and Nitrogen.Costco just over $800 installed,balanced,with Nitrogen.Oil change,dealer charge about $100 for synthetic;Costco is around $50. Got the Ott Lite tulip lamp, three of them this summer for about $15CAD,regular $49USD.Soy milk,$3 each ;Costco 6 pack ,$11 or so .Racks of lamb are definitely cheaper,unless a grocer has their 50% deals. Chesapeake Bay oysters,when available are the lowest prices I’ve seen. There’s this foam snow sled that averages $10 more at other stores.

    Like others,I agree,it depends,what do you consume?For me,I am good with my savings.It’s my time,I don’t want to drive all over to save because my time’s worth more.Now if I can only learn that couponing thing,and eat for free:)

  71. The best price for diapers, when they go on sale, is at Superstore and Walmart, with Superstore leading in my experience. Their diaper sale prices beat Costco’s any day. The good sales are infrequent, once or twice a year, so that’s when you stock up, doing your best to estimate how long your child will be in a particular size. (I tried to prepare for the future and bought one box in a larger size, but my child toilet-trained before then – still a plus as she no longer needed diapers. Maybe baby brother will use them. But I digress).

    What I like Costco for, with respect to value for price:
    – baby sleepers (Carter’s)
    – serving dishes (sometimes)
    – children’s activity books
    – some of their food products (e.g. dips, hors d’oeuvres, dessert cakes)
    – toys (sometimes)
    – contact lenses (why I got the membership initially)


  72. The meat that Costco sells is very good, it tends to be a little more expensive, but worth it

  73. I love my Costco membership, but as others have pointed out – it’s not great for everything. Personally I go there for meat, frozen veggies, dry goods like oatmeal, prescriptions and toiletries.

    Squawkfox wrote a very helpful piece on this last year, broken down by product category:

  74. Well considering Costco limits its price markup on items to 15% you can’t go wrong. You know if it’s too expensive, it came that way from the manufacturer. In other stores? You have no idea how much they are marking something up or where they got it from!

  75. Costco is useful for some items, but the availability of replacement parts for items they carry is pretty woeful. I wanted some small parts for a Seville classics chrome storage rack, but Costco doesn’t carry them. I spoke with the Canadian distributor in Vancouver and they told me that it would cost more than 25 dollars in shipping to ship a 3 dollar item to Halifax. This is not very helpful. Costco does not have an email for customer service. Both shortcomings, parts availability, and absence of customer service email, place it well down the list of companies I like to support.

  76. I like the convenience of shopping at warehouse clubs. It’s so nice not running out of essentials all the time. Of course, you do walk yourself to death in these clubs. If I were to go back to grocery store shopping for all items, I’d be there every day for something. In the long run, I think this type of shopping makes sense.

  77. While shopping at Costco you not only save money but also the most precious time. Everything has its pros and cons. but looking forward to the benefits the negative points can be easily neglected. Keep updating.

  78. I’ve been a member for 12 years, and its always worth it for me. Beef tenderloin is 1/2 the price, pesto is half the price, romaine lettuce 1/2 the price, whipping cream 1/2 the price, frozen shrimp 1/2 the price, bottled water 1/2 the price and I can could go on for an hour…plus as an executive member, I get 2 % back, last year that was $455…

    • Perhaps you all live somewhere else where Costco is miraculously cheaper, but I AVIDLY watch prices and have found Costco to be more expensive on ALL grocery items, with the exception of sales. If you look at the price per unit, it is far cheaper at Superstore and even Sobeys. The price per kg is no cheaper at Costco and I’m finding their sales to be few and far between lately. Their milk is 4 cents more expensive than Sobeys and 21 cents more expensive than Superstore and their eggs are more expensive, too. Because Costco doesn’t permit coupons, it makes their laundry and dishwashing detergent more expensive, too (as I can use a $5.00 coupon at Superstore and pay much less per unit). I do find that their non-grocery items are often a deal and are better quality than Walmart or Zellers, but I go through Costco once a week to find any sale items and am finding that four out five trips I leave with nothing because they have no sales or cheaper prices (and I DO have prices in a spreadsheet for comparison). I am sorely disappointed as I know that they used to have better deals (five years ago???)

      • Canadian Capitalist

        I agree with @A that Costco produce are not necessarily cheaper. However, we buy lots of fruits and vegetables and find Costco to have better quality produce than our local Loblaws. A lot of groceries at Costco are much cheaper, especially their in-house Kirkland brand. Examples: Extra Virgin Olive oil, Kirkland Laundry Detergent pods. Our local Costco now has a gas station. We tank up both our cars at a cost that is 2 cents to 5 cents per litre cheaper than everywhere else.

        By any chance, would you like to share your spreadsheet? My e-mail is cc-at-canadiancapitalist-dot-com. Cheers.

  79. I’ve had a Costco Membership for more than 20 years. I don’t “shop” there on a regular basis but the few items I do pick up there over the course of a year make it worth while for me to maintain a membership. I love the prices of their books and will buy there before going to Chapters. That in itself covers off the cost of the membership. I also like their clothes for kids. Their prices are very good. Not a great selection but for a toddler who cares. Also, their Kirkland brand Keurig type coffee pods are an excellent price ( and product) you get 100 count box for less than $40.00. Other places for a 24 count box name brand you pay around $17.00 so it works out to around $70.00 for 100 count.
    Paper products at Costco are really nice products but way overpriced. The price of beef is very good and the quality is excellent. But, only if you want to buy in bulk.
    I like Costco and will maintain a membership but shopping on a day to day basis certainly is not economical

  80. I just purchase a MAAX bathtub [item #282576] for $1350, and now I found the same tub (under a different name) at HomeDepot for $800 (without shipping).
    I emailed MAAX about these 2 models , and they said they are the same. This
    is too big a discrepancy to ignore. Is Costco over-charging? I always believed Costco prices were the lowest, and now I am out a lot of money!

  81. The reason you don’t need a receipt to get a refund is that with your membership # they look up on the computer and see everything you ever bought there, what date, how much you paid, etc. There is no way to buy something at Costco “anonymously”, so the data they collect on you is part of the cost of your lower price.

  82. Today I went to costco in near chabanel st..
    I am new student in Montreal, I was shocked when they did not allow me to go inside of costco just for watching.
    It is an extortion that you should have a card (55$ ) just for going inside just for watching.

  83. A Costco membership is absolutely worth it, especially if you have a family. Even the cooked chickens are larger and taste better than the regular department stores. You can save the cost of the membership easily in only one or two visits. Seriously.

  84. Six years later, about 3 years with a Costco gas bar at the warehouse closest to me, there’s no confusion about savings if you drive.Average savings is $.02 -.06 per.liter. Lately, gas is sitting at $1.40/liter; Costco hovered at $1.33/liter. Synthetic oil change at my dealership, about $85; Costco $60 due to extra oil, or it’s $49.99 pre tax.Kirkland toilet paper lasts me 10 months! Soy’s still less per 946Ml. container, especially with a coupon. Whole chickens are larger than most grocers, get an in store discount even better.Fresh rack of lamb, compared it with the second tier grocer’s frozen offering, still LESS at Costco. Flour,sugar, you get about a third elsewhere for what you pay at Costco.Spices, lots of savings here , for about $3 more you get at least 2-3 times more than a grocer .Saffron was easily $10 less than a bulk store for more.How many places offer a soda with a quarter pound hot dog, or a sausage dog for $1.50? Regardless, you need to be able to use what Costco sells.

  85. We cancelled our membership 2 days ago because Costco refuses to post English signs at their Montreal, Canada warehouses. Being only 2 of us we could not buy the necessary volume to really save. We will go shop with our daughters in Ontario for the few items that we like to have around.

  86. We are getting disillusioned with Costco.

    First they are going to stop taking American Express at end of 2014 and they don’t take Visa. That is not only inconvenient, it is ignorant.

    Then their tires seems like a good deal at first, but they are not when you know the whole picture. Michelin for example has promotions that aren’t valid at Costco. Right now for instance there is a $70 rebate available across Canada and is valid everywhere in Canada except Costco. This is per the website. When you factor that in the tires cost more here than you think. It looked like I was going to save $42 at Costco compared to another quote but really it will cost me $28 more. These are the kinds of games that get played.

    I can get the same tires cheaper at another place that is happy to take my Amex and my Visa.

  87. It is definitely worth it for us. We’re a family of 10, I go with a shopping list and I shop accordingly.

  88. When shopping at Costco, or anywhere else, you have to control your impulse to… impulse buy. The fact is that I shop mostly at Costco, and I have a clear idea of what I need, and don’t need. For example, I need diapers, dishwasher packs, coffee, etc. I *know* how much money I save. If I buy a big bag of M&Ms because it’s on special, that’s on *me*, not on Costco. I still saved money by going there.

  89. I have Costco executive membership for about 3 years and finally decided to give up. Pricing is quite of a game and they are not really better but worse than others. They keep models that are not available in other places most time and spec wise these models are poorer.

    Their groceries are always over frozen, most times having freezer burn and while brought home would not last as long. Their business strategy is quite deceiving.

  90. And don’t forget the “little” business man with no
    Dragon’s Den or board of directors worth millions; support small business and give a chance to average joe.

  91. Costco makes money…hand over fist…and yet i still dont understand why they dont open more stores here in canada. Wally mart is opening left right and center and they still make the cash. 20 minutes to shop and 45 to stand in line is outrageous, plus the hours of operation and parking a mile away from the doors is not worth the headache,stress and out right anger. Ill keep on paying an extra 30 to 50 a month for my local Canadian stores I.E Save on Foods, Co-Op , hell id even go to my local asian grocer before i step another foot in Costco.