Are Warehouse Clubs Worth It? Let’s Talk Pros and Cons...

In case you haven’t been to a grocery store in the past few years, the average price of food has skyrocketed. Inflation has made grocery shopping a more harrowing experience. With your grocery and household purchases becoming a soaring part of your budget, you may be wondering whether joining a warehouse club like Costco, Sam’s Club, or BJ’s is worth the money.

Wholesale clubs can be great! But they also cost you money. In many cases, the bulk pricing on groceries alone can make up for the membership fee. On the other hand, with the proliferation of discount grocery stores and the ability to easily find a great deal on many products online, some folks are questioning whether the annual membership fees are worth it.

If you’ve been contemplating purchasing a membership to a warehouse club, but not sure if it’s right for you, you’re in luck. In this article we break down the pros and cons, along with the costs, of a warehouse membership.

How Much Do Warehouse Clubs Cost?

Wholesale memberships vary between the clubs and they each offer different levels of memberships. Before you can decide which is best for you, it’s important to know how much an annual membership will cost.

In most cases, the yearly cost for a basic membership is between $50 and $60, and business or premium memberships range from $100 to $120, depending on the chain.

Wholesale Club	Entry-Level Annual Membership Fee	Higher-Tier Annual Membership Fee
Sam’s Club	$50	$110
BJ’s	$55	$110
Costco	$60	$120

Most memberships come with a primary card, as well as a secondary card to cover a spouse, family member, or anyone in your household over the age of 18.

Benefits of Warehouse Club Memberships

Many folks become warehouse club members under the notion of saving money. On average, a warehouse club membership is worthwhile when you can save enough money to pay the annual fee without changing your lifestyle routines and habits. And ideally your membership would be able to provide you more value than the cost of that membership!

Below are some of the many benefits that you often receive when joining a warehouse club. Make sure to think about these benefits and whether or not they’ll pay back in your specific scenario.

Lower Prices at Warehouse Clubs

It’s difficult to determine a consensus on some goods and services, however it’s generally believed groceries and household goods are 15% to 30% less expensive at warehouse clubs than at big box stores such as Walmart and Target.

As a result, the average family who spends $150 per week at the supermarket can expect to save more than $1,000 per year shopping at a warehouse club.

This isn’t always true, of course. If you shop at the discount grocery stores like Aldi and Lidl you’re likely to cut your grocery bill substantially. But there’s also a tradeoff in the quality of the items you buy. We’re fans of the warehouse clubs and the discount grocers! They can be a killer combination if you don’t mind hitting up multiple stores for different items.

Buying in Bulk = Less Shopping

Buying in bulk is almost always cheaper per unit. And by eliminating the middleman (smaller resellers), you will pay less per pound and remove the need to wait for sales at the grocery store.

Additionally, buying in bulk will result in fewer trips to the store – saving you time and money!

Awesome Customer Service & Return Policies

While many grocery stores maintain strict guidelines for the return of groceries and consumer goods, warehouse clubs generally have liberal return policies. Costco is known for its no-questions-asked return policy. For most purchases (electronics are excluded), if you’re unhappy with a purchase, you can return it for a full refund at any time.

Another little known fact is that the annual memberships themselves are refundable. Let’s say you pay for a membership and you realize after a few months that you aren’t getting any value from it. Visit the membership booth at the nearest warehouse club and they’ll gladly cancel your membership and refund the full amount of the dues you paid!

Here are the satisfaction guarantee policies for popular warehouse clubs:

Delicious (and cheap!) Food Courts

Warehouses are known for their incredible food courts offering cut-rates prices. Costco is famous for its $1.50 hot dog and soda combo, despite an inflation surge over the last year.

And Sam’s Club just reduced the price of their hot dog + soda combo from $1.50 down to $1.38. You might be thinking, “A saving of 12 cents… So what?”. Well, it’s just a symbol of their commitment to discount every cent they can to help their members.

While some warehouse clubs offer food only to members, some stores and chains sell to the public without memberships too!

Free Samples

To promote new foods and snacks, wholesale clubs often offer complimentary samples to customers wandering through the aisles. It presents an opportunity for customers to try new products without having to buy the item.

It’s not uncommon to bring your kids to the bakery section and be offered some free cookies!

Pro tip: While it’s fun to sample free food (and you should definitely do it!), don’t abuse this benefit by taking more than your share. There’s a big difference between being frugal and cheap!

Additional Membership Perks

Warehouse clubs offer access to several services, often complimentary or at a discounted rate. Some of these services may include:

Banking services/small business loans
Store credit cards
Eye care
Hearing care
Health screenings
Legal services
Travel planning services
Car buying services
Club gas stations

We’ve written a much more detailed list about Costco Membership Perks. Also sometimes it why it usually makes sense to pay for the upgraded executive membership at Costco.

Drawbacks of a Warehouse Membership

It should be no surprise that warehouse club memberships have both advantages and disadvantages. Let’s break down some of the drawbacks.

Annual Membership Fees

The only way to offset a membership cost is to purchase enough goods and services to make joining a worthwhile investment. Remember, if you average a 10% discount on purchases you would have to buy $600 of products to compensate for the cost of a $60 membership fee.

Pro tip: There are some ways to buy without a membership. Check out our Costco Hacks post for all the deets.

It’s Easy to Overspend

Consumer experts have cautioned that folks can often spend more at warehouses due to impulse buying. Everything in the store is designed to excite you and encourage more shopping for things you don’t actually need.

Additionally, you must be aware that not every item is a bargain. For example, at the grocery store, you might grab a $1 to $3 item impulsively, while at a warehouse store, the impulse buys are more expensive ($5 to $100).

The fastest way to negate the advantage of a discount is by buying more of an item than you can use. If you struggle to avoid the temptation of dumping extra items into your shopping basket, you might think twice about a warehouse club membership.

Fighting the Crowds

If you are not a fan of fighting for a parking spot or waiting in long lines, then a warehouse membership might test your patience. Big crowds are most common on the weekends and over holiday seasons. In situations like these, you’ll want to factor your time spent versus potential money saved to determine if bulking up is beneficial for you.

Too Much Bulk = Potential for Waste

Warehouse clubs are well known for offering discounts on bulk purchases. However, you should consider the logistics of buying more of a product than you might otherwise want to buy if it’s only offered in bulk.

Frugal shoppers might accidentally buy more stuff than they actually need which can lead to waste. Are warehouse clubs worth it if you end up throwing away 10% of your food/beverages because they spoil too fast?

Another thing to consider when buying in bulk is – do you have adequate storage space?

Limited Store hours

If you’re a person who loves to shop early or late to “beat the crowds,” you might want to double check those warehouse store hours before you agree to a membership. In general, warehouses open around 10 a.m. and close at 8 p.m. with even more limited hours on the weekends.

Travel Time and Distance

It may seem like there is a Publix, Kroger, Target, or Walmart on every street corner in your area. However, there’s probably only one or two (if any) membership club locations in your community.

This can make it less convenient to shop at a warehouse club which would cut into your potential perks. No sense in saving $25 on a shopping run when it takes two hours to drive there and becomes an all-day activity.

Bottom Line: Are Warehouse Clubs Worth It?

If you live close by, shop there regularly, and know which items have the best discounts, becoming a member of a warehouse club can indeed be worth the expense. Also, if you have a large family, the upfront membership fee can be accounted for rather quickly. Furthermore, the inexpensive, yummy eats you can grab at the food court, fantastic customer service, and additional perks make wholesale clubs an attractive opportunity.

On the other hand, if you live far away, despise big crowds, or prefer grocery shopping outside of normal retail hours, then a wholesale club might not be ideal for you. Small families and single folks reap less savings due to the fact that bulk discounts aren’t as beneficial.

If you’re still on the fence regarding joining a warehouse club, see if any of your friends are members and go shopping with them. You might find that using a friend’s membership can help save you money when buying a big-ticket item like a TV or simply stocking up on household supplies.

And remember, there’s no harm in trying them out, because if you buy a membership and determine that it’s not worth it for how you shop, you can cancel and get a refund easily!

**Feature pic by Marcus Reubenstein on Unsplash

Are Warehouse Clubs Worth It? Let’s Talk Pros and Cons…