Personal Finance

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

A man shops at a warehouse club.

Gyms love this time of year. People join with the best of intentions and flood the facilities, intent on being better about getting in shape in 2019 than they were in 2018.

In many ways, warehouse clubs benefit from the same phenomenon. Many members join because they expect to take advantage of all the ways Costco (NASDAQ: COST) and Walmart 's (NYSE: WMT) Sam's Club let you save money . But you only save if you actually use the membership -- if you join but rarely go, you may not recoup your membership fee. And if you have to force yourself to go, it may not be worth scratching out a small profit in savings over the price of joining.

Just like there are ways to work out that don't involve the gym, there are ways to save money that don't involve joining Costco or Sam's. You can be a fiscally responsible person who opts to not be a warehouse club member (or you can be a financially reckless one who understands that a warehouse club membership won't help). Here are the biggest reasons to not renew your Costco or Sam's Club membership.

A man shops at a warehouse club.

A membership is only useful if you use it. Image source: Getty Images.

1. Going is a chore

Shopping at a warehouse club offers a certain amount of fun to a certain type of person. If you want to visit not knowing what the best deals will be and whether you're going to leave with five pounds of salmon or a tube of ground beef, warehouse clubs may be right for you.

Costco and Sam's both offer a certain amount of mystery. That should be enjoyable even if you're not going to buy a super-discount kayak or a 6-foot tall Teddy Bear. If, however, you like consistency, you may want to shop elsewhere.

2. You waste a lot

In many cases, warehouse clubs require you to shop in bulk. For some people that just does not work. You may not have enough room to store large quantities of items, or you may not be the type of person (or family) who takes advantage.

If you buy items in bulk and end up throwing a portion of them away, you have actually wasted money. It's not about the price per pound or ounce; in the end, how much you actually use determines whether there's value.

3. You've gone digital

Both Costco and Sam's have websites, but they're limited compared to Amazon 's (NASDAQ: AMZN) , or even Walmart's. If you're a digital-first shopper who always has your phone in your hand or who likes to order through a digital assistant, a warehouse club may not be for you.

Amazon and Walmart may not always be as cheap as Costco or Sam's, but they generally offer good deals as well. If you don't like going to stores, joining a warehouse club may be a waste of money.

Look at the bottom line

Warehouse clubs do offer a lot of value . If, for example, you live near one that offers gas, it might make sense to join just for the gas savings along with the occasional visit. The same is true of savings on big-ticket items. Using warehouse clubs to book travel -- or buy a coffin, morbid as it may be -- could justify the price of membership.

Don't join Costco or Sam's just because it seems like a good idea. Join if you'll enjoy the membership and/or use it to save money in a way that won't be stressful.

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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 .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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