Costco (NASDAQ:COST) offers excellent prices on most of the things it sells. It's also a minefield filled with traps, where well-intentioned shoppers can end up spending more than they ever intended to.
Joining the warehouse club isn't for everyone, and it's hard for people to quit once they become members. It's not that Costco makes quitting difficult; it really doesn't. Instead, many customers who should let their memberships lapse decide to renew because of all the money they could be saving. If you're guilty of one of the sins below, though, it's best to save your $60 and simply not join -- or allow your membership to sunset.
1. You have no impulse control
The challenge of shopping at Costco is going in with a list and leaving with only items on that list. That's difficult in a store filled with free samples where you might be tempted to buy a barrel of candy, a three-month supply of K-cups, or an inflatable paddleboard. If you can't stay focused on your list and avoid buying things you don't really need, your membership will end up costing more than it saves.
2. You don't use it
If you never shop at Costco, you won't save any money. Joining and not going is like buying a treadmill and never taking it out of the box. Consider whether you're the type of person who wants to go to a no-frills warehouse that may not have exactly what you want. If you weren't last year, you probably won't become one this year.
3. You live alone
A Costco membership isn't useless for someone who lives alone, but it's a lot harder to get value out of joining. The chain sells largely in bulk, so the savings come when you buy a lot of goods at one time. If you live alone that won't be practical for food, and you may not want to purchase a year's worth of toothbrushes even if the price is right.
4. You don't have much storage space
City-dwellers may not be able to accommodate multipacks of family-sized cereal boxes, or soda in 24-packs. Even if you will consume it, you have to consider where it will go until you do. And if you don't have the space, then renewing is a bad idea.
5. You don't like to comparison-shop
Costco offers good prices on many things, but when it comes to bigger-ticket items like electronics or furniture, you really need to do some in-depth checking. That can be especially hard because various chains often sell similar, but not the same, model numbers for electronics items, making it harder to do your due diligence.
It should be fun
Yes, it's important to save money -- but there are other ways to do that without shopping at Costco. If you find going to the warehouse club a chore, you might want to consider not renewing or joining, and instead focusing on finding other ways to spend less.
Check out the latest Costco earnings call transcript.