Costco’s Halo Effect: Are You Really Saving Money?

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Costco’s halo effect might be costing you more than you think. Learn how to shop smarter and save real money on your next Costco run. [[{“value”:”

I’ve had three dates tell me, “You really like to eat, huh,” out of the blue, in a crowded cafe, for no apparent reason. “Uh, huh,” I say, dabbing my face self-consciously. “Why?” The typical response is a shrug and, “I can just tell.” Some things are tough to hide. This is especially true for the things that you love.

Take Costco memberships, for example. More than 1 in 100 people globally is a Costco member. Is this love? What about the utter rage, panic, and desperate horror triggered by the threat of annihilating the $1.50 hot-dog-soda combo? (A combo so beloved, a Costco founder threatened murder over its removal.) Is that love?

Something’s going on there. But don’t take my word for it. Hop on Reddit and check out r/Costco to find a devoted following. People love Costco, and for good reason — it’s cheap. But is it really saving you money?

The psychology behind Costco’s halo effect

Costco’s built a rock-solid reputation for selling bulk products at low prices. There is absolutely no doubt this is true — it’s why I shop frequently at Costco for staple products like rotisserie chicken and frozen shrimp. The brand is worth its weight in solid gold (literally — Costco sells so many gold bars, members are limited in how many they can buy).

Buried within this brand magic is a psychological phenomenon called the halo effect, a term you’ve probably picked up from daytime TV. The halo effect is the tendency to like everything associated with the object of your affection.

Say it with me now. Who do we love? Costco! What do we associate with Costco? Costco products! Literally everything it sells! Toiletries, frozen chicken, silver coins! Enough Doritos to feed a small country! Actual funeral caskets — wait, what?

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Costco’s halo effect extends to all its products

The halo effect leads you to spend more at Costco on stuff you’d never buy otherwise. We’re talking about gold bars (gold ETFs are more liquid), giant flatscreen TVs (buy used ones for dirt cheap on Facebook Marketplace), and whatever you can sample (so delicious, yet so bad for the waistline). Does this not resonate? Do you not feel the struggle?

I’ve been bad — I’ve failed to address Costco delivery, my number one way of sourcing Costco products (thanks, Instacart partnership). I’m 100% guilty of purchasing a $20 12-piece chicken taco platter and eating it in one sitting because I figured, hey, it’s Costco — good deal, right?

The version of me suffering from a post-taco food coma begs to differ. I didn’t need it; it saved me zero dollars. The other realistic option was making chicken at home (a meal under $5) and eating less, a thing I like to do (and often fail at doing). Oh, Costco. Must you tempt me so?

Let’s talk membership fees

That $65 or $130 you shell out annually for a Costco membership? It’s not just a golden ticket to bulk paradise — it’s a clever psychological trick. Once you’ve paid, you feel compelled to “get your money’s worth.” (Experts call this “sunk cost fallacy,” and it’s a common marketing gimmick.)

One grocery trip later, you’re justifying purchases you’d never make elsewhere. “But it’s such a good deal!” you cry, as you load what feels like a 55-gallon drum of mayonnaise into your cart. Is it though? Is it really?

And don’t get me started on the parking lot battle royale. The time you spend circling for a spot, the gas you burn, the years shaved off your life from stress — these are hidden costs.

Then there’s the workout you get pushing that overstuffed cart, which might explain why I’m always famished by the time I hit the food court. One $1.50 hot dog turns into three, and suddenly I’m questioning all my life choices. Coincidence, or psychological tactic?

It’s all marketing — here’s how to resist

Costco has mastered the fine art of making me feel like a savvy shopper while subtly encouraging me to spend more. It’s retail therapy disguised as fiscal responsibility. And I fall for it, time and time again, because who doesn’t want to feel as if they’re beating the system?

A few ways to avoid being blinded by the halo effect:

Stick to a grocery list like your budget depends on it, because it probably does.Click the “Reorder” button when shopping for same-day Costco delivery on Instacart. It’s a fast way to re-buy your usual purchases, and you skip browsing through tempting stuff you don’t need.Time your visits strategically. Hit Costco when you’re full and in a rush. Hungry browsing leads to costly mistakes, like 12-taco platters.

Next time you find yourself drawn to the siren song of savings, ask yourself: “Do I really need this industrial-sized pack of glow sticks?” The answer might surprise you. Or not. Either way, I’ll see you in the checkout line, because let’s face it — we all love Costco.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Cole Tretheway has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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