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Most Costco members shop at the warehouse for the same reason -- to save money on their purchases. In fact, the whole reason people are willing to pay $65 for a Gold Star membership at Costco or $130 for an Executive membership is to make back those fees in the form of savings on groceries, cleaning supplies, paper goods, and whatever other items you might pick up when shopping there.
But if you're not careful, your Costco membership could end up costing you money instead of helping you save any. Here are some key mistakes you should try to avoid at all costs.
1. Buying food in bulk that you don't eat regularly
The benefit of buying groceries in bulk is getting to save money on a per-ounce or per-unit basis. But if you end up throwing a good chunk of your food away, you won't end up saving money at all.
For this reason, it's a bad idea to buy items in bulk that you don't eat regularly. If you use milk every day for cereal in the morning and you drink a tall glass of it every night, then buying milk by the gallon at Costco makes sense. But if you only eat eggs once a week, you probably shouldn't buy a bulk pack from Costco if your monthly egg consumption amounts to eight of them or fewer.
Keep this point in mind for non-perishable items, too. Things like pretzels and chips may have a fairly long shelf life, but they don't last forever. And once you open the bag, your window to finish your food before it goes stale is limited. If you're not much of a salty snacker, you may be better off buying these items in smaller quantities, even if you're paying more per ounce at your regular supermarket.
2. Buying food in bulk that you can't finish before it goes bad
Even if there are items you eat on a daily or almost-daily basis, it's important to make sure buying Costco's bulk quantities makes sense for you. You might eat a serving of broccoli with dinner most of the time. But if it's just you who does that, then a bulk bag of broccoli from Costco may not be a smart buy. Even if you have five or six days until the sell-by date, that doesn't necessarily give you enough time to finish your supply.
In a situation like this, though, one thing you might try is seeing if there's a neighbor or friend nearby who wants to split a giant bag with you. That way, you can enjoy the bulk savings without the waste that comes with having to toss half the bag.
3. Buying discounted gift cards that sit in your wallet unused
Costco's gift card section is loaded with deals since it sells gift cards at prices below their face value. And you can also find a great selection of discounted gift cards at Costco.com.
But one thing you don't want to do is buy gift cards at Costco for the purpose of getting a deal. If those gift cards sit in your wallet or desk drawer unused, they won't do you any good. If anything, they'll simply be a source of wasted money.
If you're buying gift cards to use yourself, make sure the businesses in question are ones you actually go to. For example, right now, you can buy $100 worth of TGI Friday's gift cards for $79.99. If that's a favorite restaurant of yours, and there's one in town, then that purchase makes sense. If the closest TGI Friday's is 40 minutes away and you haven't been there in well over a year, then this is probably a deal to pass on.
Remember, too, that Costco does not allow gift cards to be returned. Once you buy one, you're stuck with it, whether you get to use it or not.
Shopping at Costco could be a great source of savings for you. And avoiding these traps could mean making the most of your membership without wasting money.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
