14 Things That Might Surprise You About Warehouse Clubs

Author: Daniel B. Kline | October 18, 2019

The exterior of a Sam's Club

Source: Walmart

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Join the club

Costco (NASDAQ: COST) and Walmart's (NYSE: WMT) Sam's Club dominate the warehouse club space. Both use similar operating models where you have to join to get in and both offer spartan stores with a limited selection of low-priced items.

You can save a lot of money shopping at these chains, but that's not guaranteed, and there are lots of mistakes you can make. These tips and tricks should help you get the most out of your membership or just be a better-informed shopper.

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A plate of food samples

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1. You can have all the free samples you want

Warehouse clubs are famous for offering free samples and neither one will cut you off as long as you're being polite to other customers. Want to make a meal of it? Keep doing laps and trying each item multiple times. You may get some looks, but you won't be stopped.

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Man watching tv with hands rested behind his head.

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2. Not all prices are the lowest

Costco and Sam's Club have great prices on many things, but that does not mean every item is cheaper than you can find it elsewhere. Bigger-ticket products like TVs or computers may not be cheaper so you should do some price comparisons before buying.

ALSO READ: 3 Reasons to Pick Walmart Over Amazon Prime

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One person handing a gift card to another person.

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3. There is one other way to get in

Joining is not the only way to get in. If you have a gift card, you can shop at Costco or Sam's Club as a non-member as long as you don't exceed the value of the card.

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A shopper makes an online purchase with a credit card.

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4. There are deals

While both companies have a fixed membership price, each has been known to offer deals on a local basis. Groupon may offer membership at a lower price or with a gift card coming back to you in the mail (or both). This will be done selectively but, of course, your membership is good at any location.

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A worker at Sam

Source: Walmart

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5. The floor staff is thin

One way warehouse clubs keep costs low is to not have many employees working the floor. Most people will be doing something beyond just customer service, like stocking shelves or picking online orders. It's possible to get help when you need it, but you may have to go looking for it.

ALSO READ: 3 Reasons to Not Renew Your Costco or Sam's Club Membership

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The exterior of a Costco store with many cars in the parking lot

Source: Costco

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6. Selection is limited

A grocery store might have the same kind of shampoo in multiple sizes. A warehouse club might offer it only in a pack of two large bottles. Part of how prices are kept down is by limiting selection.

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A man shops in a warehouse store with a cart.

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7. They are actual warehouses

They call these stores warehouse clubs because they are actual warehouses. Nearly all in-stock merchandise is available in the customer shopping area, although some may be on higher shelf than you can reach.

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A cocktail is being poured

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8. You might be able to buy alcohol without joining

Many Sam's and Costco locations have attached liquor stores. In some states, it's not legal to require a membership to access these locations so the clubs must sell to anyone.

ALSO READ: 2 Top Alcohol Stocks to Buy in 2019

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Woman pumping gas a gas station.

Source: Getty Images

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9. You can often buy gas

Many warehouse club locations have gas stations. These are generally inexpensive compared to others and often have the lowest price-per-gallon in town.

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A car is packed with grocery bags.

Source: Getty Images

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10. You don't get bags

If you want grocery bags, bring your own. Warehouse clubs are no-frills, and while they have boxes you can grab to pack your purchases in, they generally don't offer bags.

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We see a pair of hands paying cash to an outstretched hand.

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11. You can save more by paying more

Both Costco and Sam's Club offer higher-end memberships that come with cash-back offers. If you're a regular visitor to either, these are good deals. But crunch the numbers to make sure it makes sense for you.

ALSO READ: Costco's Membership Renewal Rate Hits a Record High

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Reusable grocery bags full of produce in the back seat of a car.

Source: Getty Images

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12. They deliver

For many years you had to visit a warehouse club to actually shop at one. Now, both Costco and Sam's offer delivery options. You, of course, still have to be a member, but both companies have multiple options for people who want delivery.

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Young woman writing in a notebook in front of computer.

Source: Getty Images

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13. They have websites

Neither Costco nor Sam's Club rushed into the digital game. For years, both had a limited web presence. Now, members can find exclusive deals online and shop for many items digitally.

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Empty lotion and pill bottles

Source: Getty Images

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14. Both have house brands

In many cases, the best deals at warehouse clubs are from house brands. Sam's Club has Member's Mark and Costo has Kirkland Signature. Both of these are "generics" that often offer the same quality as the name brands they are sold alongside.

ALSO READ: Target Brings Its Private-Label Strategy to Groceries

Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool has the following options: short January 2020 $180 calls on Costco Wholesale and long January 2020 $115 calls on Costco Wholesale. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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