Author: Daniel B. Kline | June 21, 2018
Use it or lose it
In many ways, joining Costco (Nasdaq: COST) is like buying a gym membership. For some people, just joining is enough. They rarely (or never) take advantage of what they paid for because just joining felt like a step in the right direction.
That, of course, is silly. If you don't go the gym you won't get in shape. The same is true of Costco. If you don't use the warehouse club you won't actually save money.
Costco generally has some of the best, if not the best, gas prices around. Its gas stations, however, are generally a bit difficult to use. They require swiping your membership card first and then paying via credit card only. In addition, they generally have traffic that only moves in one direction.
Despite those minor annoyances, the prices make shopping for gas one of the best perks you can get from joining the warehouse club, Make sure you fill up or even top off every time you go and the savings will pile up.
Make a plan
Costco can be a mine field where you end up buying a lot of stuff you don't need. To avoid that go in with a shopping list and a wish list of stuff you may not need, but would buy at the right price.
Don't deviate from that list. Even if you see something that seems like a great deal but it's not on your list take a day or two before going back to get it. Sometimes, time and not being in the store lets you see that a purchase would be a mistake.
Book a trip
Joining Costco also gives you access to its website and the site's travel section. Sometimes the deals offered there can be substantial especially when you book a full vacation package including airfare, hotels, rental cars, and more.
Pay particular attention to packages involving the Florida theme parks. Costco often has great deals for packages that include airfare, hotels, and theme park tickets. The warehouse club has deals on vacations and all-inclusive resorts as well.
Many items at Costco are sold in bulk. That's fine if you're buying toilet paper or other things that never expire, but it's not great with food. If you plan, however, you can use your freezer space to get a good deal.
Meat or chicken generally gets cheaper at the warehouse chain when you buy more. Purchase the best deal and when you get home portion it out into how much you will cook for one meal in freezer-safe bags.
You can freeze what you won't use right away, but this type of shopping takes planning. It's important to make sure you have the freezer space you need before you end up with a huge quantity of food you have no space for.
Most Costco warehouses have an attached liquor store. The prices in these are generally good, but the best prices are often on house brand booze. These are made by top-tier producers for the warehouse club and because they don't have name branding, they sell for very good prices.
Costco warehouses sell prescription eyeglasses and offer eye exams. In general, the glasses sold at the chain are much cheaper (in price, not quality) than what you would purchase from the traditional mall chains. There might not be as much choice as you can get elsewhere, but what is offered will be a good deal.
Fill your prescriptions
The pharmacy at Costco is usually a pretty drab affair. It's as nondescript as the rest of the warehouse club but behind the drab counter can be some tremendous savings. The best deals tend to be on generic drugs, but pricing can often be below traditional drugstore chains across the board.
Use your phone to make sure you are getting the best price possible. Check against Amazon if you are a Prime member. This is especially important when it comes to larger items.
Remember to factor in your time. Saving a few cents may not be worth placing even an online order when you are already in a store.
Price checking will uncover that while Costco often has the best price, it is sometimes beat. Checking will save you money, even if it means going elsewhere.
Have a meal
Costco has offered a hot dog and a drink for $1.50 since the 1980s. It also has inexpensive pizza, chicken, and all sorts of snacks. It's generally cheaper to grab a meal at the warehouse club than it is to go to a fast food chain and some would argue that the food is better.
Make it an outing
Costco is a fun place just to walk around and look at the
merchandise. In addition, the chain often has multiple stations where
people are handing out free food. You don't have to buy anything to have
fun at the warehouse club. Sometimes just window shopping and grazing
on free food is more than enough.
Buy gift cards
Sometimes Costco has deals on gift cards where you spend less than the face value of the cards. If the chain is offering that type of deal for a place where you shop, it's essentially offering free money.
Get an insurance quote
The Costco website offers both home and auto insurance through a partner. There's no guarantee that this will be the cheapest price you can get, but it's very possible that it is.
Become an executive member
A regular Gold Star Costco membership costs $60 a year. If you upgrade to an Executive membership its costs $120, but you get 2% cash back on most purchases up to $1,000. If you spend enough money at the warehouse club, that 2% can pay off the cost of joining. Of course, being an Executive member is only a good deal if you stick to your budget and only buy things you actually need.
Get a car
You can't actually buy cars at Costco, but you can use the chain's Auto Program to get a good deal on one. The company works with partner dealers to arrange for "low, prearranged pricing on many makes and models," according to the warehouse club's website.
Get the credit card
In addition to getting 2% back with an Executive membership, Costco members can save even more with the Costco Anywhere Visa card. Cardholders get an additional 2% back on any purchases (there are some exceptions) made at the chain's warehouses or on its website.
In addition, cardholders also get 4% back on eligible gas purchases (Costco gas is included), 3% on eligible restaurant and travel purchases, and 1% cash back on all other purchases.
Shop with a buddy
Many of the items on Costco's shelves are sold in bulk. One way to still get the deal, but not be stuck with a dozen tooth brushes is to hit the warehouse club with a friend who has similar shopping needs. Ideally, you'll want to plan a little bit before hitting the store in order to make sure you can end up making purchases that both shoppers need.
Check your email
Costco has been trying to build up its digital business and one tactic it's using is sending special deals via email. These may be limited-time offers at very good prices designed to get members more comfortable with its website.
Costco sells some flowers in its warehouses (more around certain holidays) and even more on its website. The selection may not be as good as your local florist, but the price is likely to be a lot lower.
Don't forget about coupons
Because its prices are already low, Costco does not accept traditional coupons. It does, however, have its own coupon page on its website where it offers deals. These can be on nearly anything in the store.
Some deals are only offered to people with the Costco credit card. Others are available for all members. Also, some offers can only be used online or in store while others can be used in either.
Buy a coffin
In most cases, you need a coffin if you bury someone. Your funeral home will happily sell you one, but likely for a lot more money than Costco charges. The warehouse club has coffins for under $1,000, which could be a big savings if you're burying someone, a vampire, or just have really weird taste in home furnishings.
Have a schedule
You may not need to go to Costco once a week or even once a month. You should, however, make a schedule that allows you to go often enough to replenish the bulk items that are usually the chain's best deals.
Even if you go every other month and stock up on water, toilet paper, K-cups, and whatever else you buy in bulk, your savings can pile up. The key is visiting Costco often enough to avoid having to buy these items at higher prices to fill holes between warehouse club visits.
Buy a mattress
Costco has deals on mattresses, but it's not set up well to sell them. The chain often has mattresses stacked vertically making it impossible to test them out.
Still, if you're buying a mattress for a guest bedroom or someplace where you aren't that picky, you might be able to score a good deal.
Shop seasonal items
You may not be able to buy a kayak or pool accessories (or an actual pool) in a northern Costco in winter, but all of those items will be in stock as the weather warms up. Check your warehouse for these items as seasons change and ask if the company plans to stock them. (Employees may not know on every item, but sometimes they might).
Get new tires (and other auto accessories)
Many Costco locations have an auto section with bays to replace tires. This is an easy thing to forget when you need accessories for your car or to replace your tires.
The warehouse club's tire prices can be better than the cost for the same item at a traditional tire center or auto repair shop. Again, check your prices, but be confident that Costco has well-trained technicians to handle swapping out your tires for you if the chain's price makes sense.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Costco Wholesale. The Motley Fool has a disclosure policy.