This article was brought to Greatful Moments by CardRates.com, with information from its warehouse-club survey and written responses from Erica Sandberg, consumer finance expert at CardRates.com.
Have you ever walked into Costco or Sam’s Club for a few things and somehow walked out with a cart full of things that weren’t on your list? I know I have. There is something about those big warehouse stores that makes us feel like we’re saving money. Everything is bigger. The packages are bigger. The quantities are bigger. And when you look at the price compared to what you might pay for a smaller package somewhere else, it can seem like a great deal.But sometimes buying in bulk isn’t actually saving us money.
If you buy more than your family can use, if your children decide they don’t like something, or if you purchase something simply because it looked like a bargain, that savings can disappear pretty quickly.
And with the holidays coming, this caught my attention even more. We’re heading into Thanksgiving and Christmas, when families are already spending more on food, gifts, decorations, travel and family gatherings. The last thing most of us need is another $100 disappearing from the budget because we went into a warehouse club for five things and came out with twenty.
That is why I wanted to take a closer look at this survey and ask some questions about how families can actually save money when shopping at warehouse clubs.
A Little About Erica Sandberg: Erica Sandberg is a consumer finance expert at CardRates.com. CardRates.com recently surveyed more than 1,000 parents about warehouse-club spending. The survey found that nearly half of parents overspend on most warehouse-club trips, with the average overage being more than $100.
The survey also found that 65% of parents have put a warehouse-club purchase, including gas, on a credit card they couldn’t pay off right away. Those numbers made me want to ask Erica how families can avoid turning those supposed savings into extra debt.
Our Questions for Erica Sandberg
Why do you think parents are particularly susceptible to overspending at warehouse clubs, even when they believe they are saving money by buying in bulk?
Just about everybody is susceptible to overspending at these stores, but parents may be even more so. Giant boxes of cereal, enormous packages of paper towels, 5-gallon jugs of laundry detergent seem like such a good deal when you compare them to the smaller sizes you get from a regular store. With a growing family, this can make a lot of sense. However, not everything needs to be purchased in such quantities and these warehouse clubs can normalize the extra large sizes. Bulk cheese can be fine, but if your kids turn their nose up at it half will go green before it’s consumed.
Your survey found that nearly half of parents overspend on most warehouse-club trips, with the average overage being more than $100. What is one thing families can do before walking into Costco or Sam’s Club to keep that extra $100 from disappearing?
First, decide if you really need to walk in at all. You can purchase a lot of things from these membership clubs online and have them delivered with no extra fee fees. That can definitely save you from impulse shopping.
Second, do the “oh, that looks interesting, I’ll go back if I still want it” exercise. That’s what I do. And very rarely do I actually turn my cart around, find the aisle where that product was, and then buy it.
Steer clear of certain sections, too. I shouldn’t be anywhere near the bakery area. I know this. Identify which types of products that are especially compelling and make a pact with yourself that you won’t stop and peruse.
Costco-only members were much more likely than Sam’s Club-only members to have charged purchases they couldn’t pay off right away. What do you think is behind that difference?
One of the reasons maybe that Costco can sell more expensive items than Sam’s Club. There is certainly overlap, but Sam’s Club can appeal to people who are on tighter budgets. Costco shoppers tend to have higher average annual income incomes so their shoppers may be more apt to spend more – and then get into greater debt.
With the holidays approaching, what warehouse-club purchases should families be especially careful about putting on a credit card if they don’t already have the money set aside?
I was in Costco this past weekend, and the holiday items are out in force! Everything from food items to decorations are all so compelling. This is definitely a time to exercise control. Before you go, decide how much you want to spend and if you are going to be using a credit card, know how you will be repaying that bill. Ideally, you will want to delete the entire balance by the due date but if you are comfortable splitting it up in a few payments, you can do that as well.
What is your best advice for families who genuinely need to shop at a warehouse club to save money but also know they are easily tempted by those “while I’m here” purchases?
If you’re going to spend on things that aren’t on your list, head over to the food court. That’s where you will find some of the biggest bargains and it can satisfy that need to splurge. Even if you have the kids in toe, lunch at either Costco or Sam’s Club will not break the bank.
Other than that, learn from last time. If you had spending regrets from previous shopping excursions, take a moment to remember what they are. And almost everyone has them. Over the summer I bought a large platter of shrimp with a cocktail sauce. It was an amazing price and we tried to eat it all but it was impossible! I think of that purchase now when I go and say, “never again.”
I have to admit, that last answer made me laugh because I think most of us have our own version of the giant platter of shrimp. We’ve all bought something because it was a great price. We’ve all thought, “We’ll use this.” And then sometimes we don’t.
That is probably one of the biggest things I took away from Erica’s answers. Buying something for less money doesn’t mean you’re saving money if you didn’t need it in the first place. I also really like the idea of waiting. If something catches your eye, don’t automatically put it in the cart. Tell yourself you’ll come back if you still want it.
How many times have we walked away from something and completely forgotten about it? Probably more often than we realize. And as we head into the holidays, I think this is especially important. We have enough things to spend money on without letting the warehouse-club aisles convince us that every holiday decoration, giant food package or “great deal” belongs in our cart.
Make your list. Know your budget. And remember that the goal is to save money, not simply to buy more things because they are sold in bigger packages. And if you know the bakery is your weakness? Maybe listen to Erica and stay away from that section.
This article was brought to Greatful Moments by Catherine McNally of CardRates.com, who shared CardRates.com’s warehouse-club survey with us and arranged for us to receive written responses from Erica Sandberg, consumer finance expert at CardRates.com.
The survey included more than 1,000 parents and examined warehouse-club spending, overspending and credit-card debt. You can read the complete Warehouse Club Survey and see the study results for yourself.
Thank you to Catherine, Erica and CardRates.com for bringing this information to Greatful Moments and giving us something to think about as we head into the holiday shopping season.
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