Please ensure Javascript is enabled for purposes of website accessibility

5 Things You Shouldn't Buy at Wal-Mart

By Daniel B. Kline - Sep 10, 2015 at 6:00PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company has some great deals and is generally inexpensive, but there are some pitfalls to avoid.

Wal-Mart (WMT 0.11%) has a well-deserved reputation for offering low prices.

The company pushes value as its calling card, and in most cases it delivers. Being sometimes the cheapest isn't the same as being always the cheapest, and Wal-Mart can be beaten on a pure price basis.

Dollar General has even beaten the retail giant on Kantar Retail's annual study, which assesses the lowest price available on 21 categories across the edible grocery, non-edible grocery, and health and beauty aids segments, CNBC reported. In that case, both companies offer excellent value, but in a few areas Wal-Mart can be consistently beaten by select competitors.

You'll never go broke shopping at Wal-Mart compared with other retailers, but being selective can help you multiply your savings.

Toys and games
Having spent a couple of years running a large, successful independent toy store, I'm well versed on toy and game prices, and I can say that Wal-Mart doesn't offer the best deals. It has good prices -- sometimes the best of all the physical retailers -- but on many, if not most, items, (AMZN 0.25%) is cheaper.

This happens not because the online retailer undercuts its bricks-and-mortar rival. Instead, it's because Amazon's third-party partners are fulfilled by Amazon Prime, meaning they ship with free two-day shipping for members. This system works on a bidding model, whereby the lowest price gets the most exposure and sellers can see when they're the lowest.

In many cases, this method leads to items that are listed just a few points above wholesale cost. It's not uncommon to find popular items below cost, which seems like a bad business for the partner, but it happens quite often. 

Buying toys and games at Wal-Mart isn't always the best value. Source: Wal-Mart.

Buy organic milk elsewhere
Wal-Mart has made an increased push into organic foods in recent years, and in some cases -- packaged goods specifically -- it offers low prices. That's not the case with milk, as Kiplinger found in an October 2014 article that rivals often beat the retailer:

Both Aldi and Trader Joe's beat Walmart's price on organic milk. A half-gallon of organic milk was about 30 cents less at Aldi than at Walmart. A gallon of organic milk was about 50 cents less at Trader Joe's than at Walmart. We've even found organic milk for less at upscale grocer Whole Foods.

It's hard to be more expensive than Whole Foods on anything, so an organic-milk buyer should at least be wary and check prices before buying at Wal-Mart.

Gift cards are a better deal elsewhere
Wal-Mart and other retailers offer an assortment of gift cards sold at face value to a large range of popular stores, restaurants, and even online retailers. These seem like a good deal because the chain sells them for the value of the card. 

In reality, however, it's possible to buy discounted gift cards on websites including Gift Card Granny, which has a surprisingly large array of choices. Your savings here could be significant, and in most cases it will be enough to pass up the convenience of buying when you're in Wal-Mart already. 

Generally, don't buy batteries
Batteries are expensive, and Wal-Mart isn't the cheapest place to buy them. Dollar stores have cheaper options (though that's sometimes a case of getting what you pay for) and the warehouse clubs usually have better battery deals. You'll have to buy in bulk, but batteries have a long shelf life, according to an FAQ from Energizer, which says: "cylindrical alkaline batteries have a shelf life of 5 to 10 years and cylindrical carbon zinc 3 to 5 years. Lithium Cylindrical types can be stored from 10 to 15 years."

That's probably enough time for anyone to profit from buying in bulk rather than purchasing on an as-needed basis.

Gift wrap is a dollar-store item
Wal-Mart has an extensive selection of gift wrap at what seem like good prices, but wrapping paper is a stock item at nearly every dollar store, which has it even cheaper. Even on a seasonal basis this is true, as last year's Halloween candy may not not be saleable a year later at a dollar store, but last year's wrapping paper is still totally current.

The same logic applies to gift bags, which can cost a few dollars at a Wal-Mart but are, of course, $1 at the dollar stores.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
$119.20 (0.11%) $0.13, Inc. Stock Quote, Inc.
$2,151.82 (0.25%) $5.44
Whole Foods Market, Inc. Stock Quote
Whole Foods Market, Inc.
Dollar General Corporation Stock Quote
Dollar General Corporation
$187.60 (-6.82%) $-13.73

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.