3 Rookie Costco Mistakes to Avoid

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Thinking of getting a Costco membership? Read on to see what pitfalls you’ll want to steer clear of. 

Many people opt to get a Costco membership because of the potential savings involved. Buying groceries and household essentials at Costco will often result in a lower credit card tab compared to buying those things at the supermarket or a local big-box store.

But if you’re brand new to Costco, there are certain traps you might fall into. Here are a few you’ll want to avoid at all costs.

1. Buying the wrong membership

When you join Costco, you can choose between a basic membership and an executive one. A basic membership costs $60 per year and an executive membership costs $120.

You might assume that you’re better off starting out with a basic membership, especially if you’ve never really shopped at Costco before. But actually, the executive membership might be a much better bet.

An executive membership gives you 2% back on all Costco purchases you make (including online purchases), the same way a credit card might give you 2% cash back on certain purchases. So if you end up spending more than $3,000 at Costco in the course of a year, you’ll come out ahead financially by virtue of choosing the executive membership.

But one lesser-known perk of the executive membership is that if you don’t end up earning enough money back to make up the added $60 fee, Costco will refund you the difference. So, let’s say you only spend enough at Costco during your first year to snag $50 back from your executive membership. If you decide to downgrade to a basic one, Costco will refund you $10 so you’re not actually out any money.

2. Avoiding Kirkland products

Costco carries a host of brands, from the well-known ones you see advertised frequently to its signature Kirkland brand. You might assume that it’s best to steer clear of Kirkland products. But actually, many Kirkland items are not only less expensive than their brand-name counterparts, but just as high in quality.

In fact, certain Kirkland products are actually made by major manufacturers and are simply branded differently. So if part of your goal of joining Costco is to save money, then it pays to give Kirkland products a go.

3. Taking a chance on bulk items you haven’t tried before

If your family consumes certain cereals, vegetables, and fruits regularly, then it could pay to get them at Costco in bulk to save money. But one thing you generally don’t want to do is buy a bulk supply of an item you’ve never used before.

You might sample some Costco crackers while doing your shopping and decide to buy a bulk box of 300 of them. But if your kids and spouse end up hating those crackers, and you get tired of eating them after a few days, then you might end up throwing your money away.

Joining Costco could end up being a rewarding experience for you — financially and otherwise. Just do your best to avoid these mistakes so you can really make the most of your membership.

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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.

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