Costco vs. Sam's Club: Which Should You Join?

In July, grocery prices were up 3.6% on an annual basis, according to last month's Consumer Price Index. But joining a warehouse club could help you save money on the cost of feeding your family. The question is, which one should you join?

You probably don't need two warehouse club memberships. But since Costco and Sam's Club each offer plenty of perks, it can be tricky to decide which one to go with. Here are some points of comparison to consider when making your decision.

1. Location

Because the cost of a Costco membership is comparable to that of joining Sam's Club (more on that in a minute), the main factor to consider in your decision is location. You're more likely to get good use from your membership if you choose a warehouse club that's located conveniently to where you live. So if the nearest Costco is eight miles away and the closest Sam's Club is 15 miles, you may want to favor Costco by virtue of that alone.

Also, consider the cost of getting around town. By choosing the option that's closest to your home, you can save a bit on gas during the year.

2. The cost of a membership

A basic Sam's Club membership costs $50 a year, while a Plus membership costs $110. The latter gives you 2% cash back on Sam's Club purchases, up to $500 a year. It also gives you access to your local store earlier in the day at select locations. It's also worth noting that Sam's Club tends to run promotions that offer a discount on your first year of membership.

By contrast, a basic Costco membership costs $60 a year, while an Executive membership costs $120. With an Executive membership, you earn 2% back on Costco purchases, up to $1,000 a year. Costco also doesn't tend to offer discounts on memberships directly (though sometimes, it'll throw in perks like a store gift card when you sign up at select times, and you can argue that those perks help offset the cost of a membership).

As you can see, the cost of joining Sam's Club is fairly comparable to Costco. But if both stores are equally accessible to you, then you might as well go with the option that costs less. 

Can you test the waters before committing?

One good way to see whether Costco is a better option for you than Sam's Club, or vice versa, is to visit the store a few times and see which experience you prefer. Sam's Club makes that a bit easier than Costco, though. That's because it offers a free trial, while Costco does not.

However, with Costco, you can sort of do your own free trial in a roundabout way. Costco is committed to customer service, and it will refund your membership if you're not satisfied with it. So one thing you could do is sign up for a basic membership and visit a few times to see how things go. If you decide that Costco isn't for you, just ask to cancel your membership and get your money back.

Choosing between Costco and Sam's Club isn't always easy. But if you focus primarily on location followed by membership costs, you might land on a decision you're happy with.