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Listen Up

ListenUpSyndicate content

Help from our ListenUp experts and women who have tackled some of life’s toughest issues.

ListenUp | 07/26/2009 11:00 pm

The Blessings – and Curse – of Costco, by Jean Chatzky

By Jean Chatzky

Editor’s note: An award-winning journalist, author and motivational speaker, Jean Chatzky needs no introduction. As a financial editor for NBC’s "Today Show," Chatzky offers savvy advice on managing money and wealth. Her latest book, The Difference, provides simple strategies for a prosperous financial future. Visit her blog at JeanChatzky.com.

The first time I shopped at Costco, I bought three bathing suits for my daughter, a set of 50 (maybe more) magic markers and a box of Ring Pops so large even my children got sick of eating them. My husband, Eliot, went me one better. He bought a tent.

Did I mention we had no intention of buying these things?

Did I mention that my daughter is of the age where my picking out her clothes is no longer acceptable?

And did I mention that the register receipts set me back a few hundred dollars?

Turns out I’m not the only one. A study by Michael Norton, assistant professor at Harvard Business School, and Leonard Lee, assistant professor at Columbia School of Business, points out that many people do exactly the same thing. Why? The membership fees you pay to belong to warehouse clubs – like Costco, Sam’s Club, BJ’s – make people think they are getting better deals. In fact, they often are. But those deals often make you buy more (in my experience sometimes much more) than you need.

Which is why for about three years, I refused to step foot in one. I didn’t want to be tempted by vats of juicy blueberries, bestsellers that would stack up on my nightstand, newfangled phones. But then I got married and Eliot – despite the tent fiasco – is a Costco fan.

So, we re-upped, this time with ground rules. We went to the store with the understanding that we would buy absolutely no food. We wouldn’t even walk down the aisles that contained food. I broke that rule in about five minutes shoving a bottle of Kirkland Extra Virgin Olive Oil (it was ridiculously cheap!) into the cart. We bought Ziploc bags, paper towels, toilet paper, cleaning supplies. We loaded up on paper plates for summer barbeques, napkins and batteries. With each purchase, we asked ourselves the questions: Do we need this? Will we use it up? And with that as a guideline, we still managed to spend $300. But we didn’t feel nearly as bad.

It’s been three months since then … in fact, maybe four. I still have enough baggies to last through the lunch-making months of the school year, but I’m running low on olive oil and I’m out of Tide. Clearly another Costco run is in the offing. I recently opened the lines on my radio show to see if any listeners had suggestions of other ways to get abargain while keeping my desire to get all the bargains in check. They did:

From Heather who shops weekly at Costco and her local grocery store: "I’ve checked the unit prices of the items I buy most often at both places. So I know – for sure – that the big box of goldfish crackers at Costco ($6.97) would cost $9 or $10 at the supermarket. Dog food is cheaper too."

From Lisa, who used to shop at Sam’s Club itself but has recently gotten addicted to the store’s online, late-night auctions at Sams.com: "I recently got such a good deal on an iPod dock that I bought three. I gave one to my son. One to my daughter. Did I need three? Um, no. But they were such a bargain I couldn’t resist."

From Glenn, who went into Costco last week for barbecued ribs and came out $190 later with bottled water, beer, paper towels and – oh yes – an organizer for his electrical cords: "I’ve been told [by my wife] there are certain aisles I’m not allowed to go down anymore."

Do any of you have warehouse shopping stories (tents?) or strategies (lists?) you’d like to share?

56 Reader Comments (so far…) Sign In or Register to comment

Donna H
Oops!  I should have said "…so buying a single can somewhere else was a better deal for me".
By Donna H on 07/27/2009 9:10 am
phyllis Doyle Pepe

I have a BJ list listing everything we buy there from paper products to vitamins. We go once a month. I hurry through the aisles like someone on speed and only purchase what is on my list. I never linger, never glance at all those catch-your- eye displays and that way it works for you. Here’s an exchange I once had:

 

 

 

Conversation at B.J’s this morning after not finding my Total Cereal:

 

Me: (going to counter where young girl is manning station) Excuse me, but could you please tell me to whom it is I could speak to about something that is no longer on the shelves.

 

Girl: You can speak to me.

 

Me: Well, thank you. There doesn’t seem to be any Total cereal.

 

Girl: (Punching in her computer) Sorry, but it has been discontinued.

 

Me: What! (saying this with great consternation) Who on earth discontinued it?

 

Girl: I don’t know. Sometimes things get discontinued and we never know why.

 

Me: But somebody knows why.  Who is in charge around here?

 

Girl: Probably the manager, but he wouldn’t know why either.

 

Me: You mean to tell me there is somebody who makes these decisions but nobody knows who that is?

 

Girl: Pretty much. I’m just a lowly sales clerk so I don’t know anything.

 

Me: Well, you don’t look or sound lowly to me. You have been lovely, but back to the issue at hand: There has got to be somebody I can yell at.

 

Girl: You could yell at the manager, but he’s not here today. And as I said I don’t think he’s be able to tell you why.

 

Me: So it’s like there’s someone somewhere who’s pulling all these strings and nobody knows who it is. 

 

Girl: Like God, maybe

 

Me: Yeah, although he doesn’t seem like a Total eater to me.

 

Girl: My mom loves Total, eats it every morning.

 

Me: As do I! It’s a healthy, 100% vitamin enriched cereal, not like these fancy sugar loaded cereals that are a ubiquitous commodity these days.

 

Girl: whatever.

 

Me: Well, thank you, what you can do for me is to convey this message to your clueless manager. Tell him you had an irate woman on your hands this morning threatening to never step foot in this store again if Total is discontinued. Got that?

 

Girl: I sure do. And thanks for shopping at B J’s. 

 

 


 

By phyllis Doyle Pepe on 07/27/2009 9:41 am
Belinda Joy

Oh Jean, I had to laugh when I read this article because it is so true! You really do end up spending more money in these places than you would a normal grocery store simply because of the bargains they offer.

I think the solution for shopping at a Costco or Sam’s Club is the same as when you shop at a normal store, ALWAYS make a list of what is needed and stick to it. Under no circumstance veer from it no matter how much that big box of 100 sponges for $10.99 looks tempting. You shouldn’t ask yourself "do I need this" because in that moment when you think you have a chance at a bargain, you’re going to lie to yourself and say….yes!   But shopping with a list keeps you honest and on the straight and narrow.

By Belinda Joy on 07/27/2009 10:16 am
Maggie W
I’m with MK P.  I’m no fan of warehouse shopping.  It’s too overwhelming for me.  I prefer smaller grocery stops and usually just buy what we need. I don’t squirrel things away except for hurricane season ( oops… need to be thinking about that now !)   But, they are just great for large families, churches, scout organizations,  athletic clubs, etc.    Many organizations  save so much by buying in bulk.  Plan ahead and Sam’s,  Costco, can save big bucks. 
By Maggie W on 07/27/2009 11:12 am
Barbara
For me, it’s not just the impulse shopping.  It’s the fact that I had to pay for the membership.  You know what kind of deals you need to get to justify a $50 or $75 membership?  That’s a lot of bargains you have to find.  If I can find it near the price at Target or some other place, just makes sense to buy it there.  Plus I can put it on my credit card.  In order to use a credit card at Costco you have to use theirs.  I never carry my check book with me and usually little cash.  I like everything showing up on my credit card bill once a month.  I pay it off in full but I can see exactly where my money is going.
By Barbara on 07/27/2009 11:26 am
Rachel M
I am a single woman who shops at Costco for vitamins, over the counter meds, paper products and water. All these items if I bought them at the store would cost me so much more. I even have an appt there today for opt. Another thing I get there are tires.
By Rachel M on 07/27/2009 11:45 am
J B
I never go without a list, and I tend to buy the same things…butter, olive oil, I love their baby back ribs and pork roasts…if I’m having a party, you can’t beat their prices on party platters of sandwiches etc. At Christmas, if I’m giving someone a book, I buy it there. But you should never step foot in one without a list…and stick to it!!
By J B on 07/27/2009 11:49 am
KatyDid Wells

My preference is to support local, independent stores and I do that when I can, but with the economy the way that it is, you simply can’t ignore the cost savings at Costco. 

There are certain things that I get at Costco - E.V. Olive Oil, grape tomatoes, avocados, grapefruit, organic chicken broth, canned tomatoes and black beans, freezer bags, vitamins, and Pellegrino (at $11.00 a case  - $8.00 when they offered a coupon - it sustains my habit!).  Beyond that, I try to avoid the other aisles.  Unfortunately, my husband occasionally goes along and then, we’re usually sunk - he loves to cruise the DVD aisle and we usually end up with one or two.  Their book aisle is nice (and cheap) as well, but I’m a strong believer of the vanishing independent bookstore so I’ll spend a little more on my books in order to support them.

I used to get dog treats at Costco as well; they offer a wide selection, much cheaper than anywhere else, but after closer inspection, they’re cheap because most of the treats are from China and we’re doing our best to avoid supporting China these days. 

I have been a member of Costco for many years and since saving money is important to us, I appreciate their existence, but Jean’s article rang true to me - if I get out of there without spending a couple of hundred dollars, I feel as though I’ve accomplished something. 

By KatyDid Wells on 07/27/2009 12:03 pm
Elizabeth Newman

Not to be nitpicky, but in defense of the sales clerk, she was right…most of the times discontinuation orders are handed down, and the workers at the store just simply do as they are told. I worked in retail for many years, and had MANY conversations such as these…I was usually more polite than this, but I can’t even count how many time I got yelled at for summoning a manager because someone was PO’d that something had been discontinued, and demanded an explanation why…the answer was almost always, "We have no idea, it was a corporate decision".  The people who make these decision don’t usually deign to tell the people at the bottom of the corporate food chain every step of the decision making process.

By Elizabeth Newman on 07/27/2009 2:35 pm
Elizabeth Newman
My husband and I have a Sam’s membership…we usually do a BIG shopping trip about every 6 months (to stock up the deep freezer and pantry), but I also go there for things like laundry detergent, paper plates, and beauty supplies. We have started using their online ordering system for groceries; you make up a "click and pull" list and submit it; it’s sent to the store, they pull the items for you, you go and pick them up, pay for them and leave. When I do that I never go farther than the front of the store to get my stuff and pay for it, which keeps me from spending ghastly amounts of money; we can easily spend four to five hundred dollars on our "stock up" trips.
By Elizabeth Newman on 07/27/2009 2:40 pm
Annie Cieslukowski

Costco opened less than a mile from our house two years ago, and we shop there fairly frequently.  Their meats are a little pricey compared to some other stores, but they are the best quality. We save a bundle on gas, milk, and bread, and splurge on treats for the kids when they have coupons.

With two little kids, we don’t get to go out very often, but when we do, we stop at Costco first for cheap movie tickets!

By Annie Cieslukowski on 07/27/2009 3:19 pm
Cheeky Wombat

Only shopped at Costco a few times many years ago when we had a free membership through my work. Didn’t like it.

We prefer to spread our money all over town. Veggies from the local organic garden; cheap wine, more produce, muffins and sausages from Sprouts; coffee, bread, some dairy products from Trader Joe’s; dog food, toiletries, paper and cleaning products from Target and milk, alcohol, meat and various other items from the local grocery chain where my son works (and we get a discount). Hubby and I have a little routine on Saturday, making the rounds doing the marketing. I shop the ads first to see what’s on sale and that is what’s on the menu.

By Cheeky Wombat on 07/27/2009 11:05 pm
phyllis Doyle Pepe
I think many of us who shop at the BIG stores do so just for certain items and spread, as you do, our green backs around to many other places, especially in the summer with the many vegetable and fruit stands and it’s even better when you have your own gardens.
By phyllis Doyle Pepe on 07/27/2009 11:11 pm
Dona Howlett

Andrea,

I love Costco……(by the way our local Costco’s did handle the dog food episode properly.) I don’t have animals, but other family members do and they were very pleased with Costco’s concern.

The main reason I love Costco is they supply Electric shopping carts.

Other wise I wouldn’t be able to shop at all. They also offer the service of a Shopper to help you load and unload your basket.  One day I went in and the Electric carts were all in use.  The manager got someone to push me around shopping in a wheel chair.

I find all their merchandise top quality……their food is fresh and very good. And almost all their Paper goods and household products are cheaper than other stores……..also computer related items are cheaper.

 All the employee’s are polite and helpful ………always.

Now you know why I like COSTCO!!!!!!!!!!!!!!!!!!

I could go on and on but then I’d sound like a commercial………Maybe they’ll hire me..LOL

By Dona Howlett on 07/28/2009 12:18 am
Dona Howlett

Barbara,

I use my American Express card at Costco and get back 2% at the end of the year……..

I love that extra 3 or 4 hundred dollars in February.

By Dona Howlett on 07/28/2009 12:26 am