A Warning to Costco Shoppers Who Are Thinking of Buying Gift Cards

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Costco sells gift cards. But read on to see why you may not have success buying yours there. 

Many people flock to Costco to load up on low-cost groceries and household essentials. But the warehouse club giant sells a lot more than just bulk breakfast cereal and paper towels.

You can find everything from apparel to electronics to furniture at Costco. And it could also be a good source for buying gift cards.

That said, Costco’s gift card offerings may not meet your needs. So it’s important to be mindful of these points if you’re looking to purchase gift cards at Costco.

1. Event gift cards might come with restrictions

Costco sells gift cards to different events. Right now, for example, you can buy gift cards to cover tickets to NASCAR races and NCAA games. And in the summer months, you can often find tickets to Major League Baseball games.

But when you buy event gift cards, you’re often limited to specific dates. And those may not align well with your schedule. Always read the fine print before buying a Costco gift card that you’re going to redeem for event tickets.

2. The selection may be limited

The selection of gift cards you’ll find at Costco can be hit or miss, depending on your local store. If there’s a specific gift card you’re looking for, don’t bank on getting it at Costco — even if you’ve seen it there before. You may have better luck at your local pharmacy or supermarket.

That said, you’ll generally find more options for gift cards on Costco.com than in stores. And in many cases, when you buy your gift card online, you’ll get it emailed to you so you have access to it right away.

3. You may not find the denomination you want

One major benefit of buying gift cards at Costco is that you’ll often find them priced below face value. For example, you might spend less than $100 for $100 worth of gift cards to a certain restaurant. But one hiccup you might run into is struggling to find a gift card in the exact denomination you want.

Let’s say you want to give your child’s teacher a $35 gift card to IHOP during the holidays. Costco sells a four-pack of $25 IHOP gift cards for $79.99, which is a great deal since that would normally cost you $100. But it also leaves you in a jam if you want to give a $35 gift card and you don’t want to go under or over.

A $25 gift card may not be enough for that teacher and a friend or partner to share a meal. But $50 (two $25 gift cards) may be more than what you’re looking to spend.

Buying your gift cards at Costco could result in a lot of savings. But before you gear up to buy gift cards at Costco, be mindful of these potential issues. Also, have a back-up plan if you’re buying a gift card to hand over as an immediate gift. That way, you’re not left in the lurch.

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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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