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Costco can be a great place to save money, but shopping there isn’t right for everyone. Here are a few signs you should steer clear of the warehouse club. [[{“value”:”
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Costco is a popular warehouse club because shopping there allows many people to keep more money in their bank accounts by taking advantage of the deals on offer. But, joining Costco and shopping there regularly is not for everyone. While it can be a boon for the personal finances of some households, it could be a detriment to others if not used correctly.
You should watch for these three big signs that you shouldn’t shop at Costco. If you spot any of them, it may be a better idea not to sign up for a membership to the popular warehouse club.
1. You regularly save a ton of money on household items using manufacturer coupons
You can get inexpensive items from grocery stores and drug stores if you combine manufacturer coupons and store coupons. Unfortunately, this technique does not work at Costco.
The problem is, Costco does not accept manufacturer coupons. While it offers its own deals, you can’t combine them and stack coupons and sales as you would be able to do at other stores you might shop at. You may actually end up with bigger credit card bills if you start shopping at Costco since you’ll lose the chance to put your coupon-shopping skills to use.
2. You don’t have much storage room at home
Costco, like most warehouse clubs, offers good deals because you can buy items in bulk. You typically can’t just buy a roll or two of paper towels or a small box of cereal — you need to purchase a jumbo size.
And if you don’t happen to have room for 12 individually wrapped paper towel rolls in your home, along with many other large products you’d have to buy to make your membership worth it, then shopping at Costco doesn’t make any sense.
3. You prefer to buy mostly off-brand items
Costco offers its own store-brand products, which are sold under the Kirkland Signature name. However, there are only around 350 Kirkland-brand products on Costco store shelves. That isn’t very many, especially when you consider that Walmart offers more than 29,000 products under its Great Value label.
The rest of Costco’s deals come from smaller markups on name-brand items. But, those name-brand items, even at a discount, may be more expensive than generics from other companies. Walmart’s Great Value Honey Nut O’s Oat Breakfast Cereal, for example, comes in at $0.153 per ounce, while Costco’s Cheerios are $0.25 per ounce.
If you’re a fan of store brand or generic items, you would be better off shopping at other stores that offer better selection rather than shopping at Costco and spending more to get name-brand products you don’t really want or need.
If you spot any of these three signs, you should most likely pass on a Costco membership. Shopping there probably wouldn’t provide you with enough savings to justify the $60 annual starting membership price. Instead of wasting money on a membership fee, you can keep going with your current system of buying generic, using coupons, or only buying the number of items you can comfortably (and neatly) store in your home.
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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.Christy Bieber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.
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