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6 offbeat warehouse club savings

Clubs raise prices, but less-publicized perks may offer extra savings.

By MSN Money Partner Oct 11, 2011 1:22PM

This post comes from Kelli B. Grant at partner site SmartMoney.

 

SmartMoney on MSN MoneyAs joining a warehouse club gets more expensive, would-be members may need to look a little further than multipacks of frozen pizza and bulk packs of paper towels to decide if the annual fee is worth it.

 

Costco announced last week that it will raise prices by 10% on Nov. 1, a move that increases the basic membership to $55 from $50 and the executive membership -- which comes with a 2% rebate on all purchases -- to $110 from $100.

 

In January, BJ's Wholesale Club increased its fee to $50 from $45, which a spokeswoman says was done to maintain low store prices and other membership benefits. (Costco did not respond to requests for comment.) Sam's Club is the lone holdout: A spokeswoman says there are no plans to change its longtime $40 fee.

 

The changes are minor for business customers, but are enough to make consumers reassess, says Howard Jackson, the founder of HSA Consulting Inc. in Knoxville, Tenn. "Clearly you have to look at the overall investment: how often you're going to shop, and what you'll spend," he says.

 

Savings on groceries alone may not be the answer. Industry tracker Warehouse Club Focus estimates that club prices are 25% to 50% cheaper than at other retailers, but coupon clippers say they can beat those discounts by matching manufacturer's coupons and supermarket sales. "I consistently slaughter the prices at warehouse clubs," says Jill Cataldo, the founder of Super-Couponing workshops.

 

But there are other, less-advertised membership perks that could still make joining worthwhile. Here are six for shoppers still on the fence:

 

Gasoline. Warehouse clubs tend to price their fuel at a loss to get shoppers in the store, so members who live close to their club can save a bundle on gas, says Jackson. In most cases, nonmembers can't buy at all, he says, so a member who isn't filling his tank is losing out on substantial savings. At $3.30 per gallon, the Monroeville, Pa., Sam's Club is currently 13 cents lower than its next-cheapest competitor, according to GasBuddy.com. At that spread, a driver would save almost $2 on a 15-gallon tank, or more than $100 on a year of weekly fill-ups.

Electronics. Check warehouse club prices for your next tech upgrade. At Sam's Club, a 55-inch LG HDTV with 3-D capability runs $1,397 -- $303 less than the same model at Best Buy. Return policies are more generous, too, if you change your mind or have any problems. Costco and Sam's Club both allow returns within 90 days, compared with 30 days at Amazon and Best Buy. Bring a smartphone for easy comparisons, though comparing can be tough if model numbers are store-specific.

 

Financial services. Bank partnerships allow members to get slightly better rates. Capital One offers Costco members preferential rates on its InterestPlus online savings account, which yields 0.85% plus a quarterly 10% bonus on interest earned. The members-only 0.91% rate equates to an extra $7 in interest over a year on a one-time, $10,000 deposit. But that yield is only modestly competitive with other high-yield accounts. American Express Bank, to name one, offers 1% to all accountholders.

 

Insurance. Club members may secure better rates on homeowners and auto insurance policies. BJ's offers a 10% discount through Liberty Mutual, while Costco promises savings of "up to $485.66" through Ameriprise. Such affiliate discounts may also be available through an employer, alma mater or other group, says Scott Simmonds, a Saco, Maine-based insurance consultant. "The trick is to shop around first and make a decision based on value," he says. Post continues after video.

Tickets. Shoppers planning a trip to the amusement park or movies can often save 30% by buying ahead at the warehouse club. For example, Costco charges $82.99 for a 10-pack of AMC Theatres vouchers that don't expire and can be used for any showing. A New Yorker would spend $115 at the box office for those tickets. But less frequent adventurers might find better one-time offers on daily deal sites.

 

Cars. "I wouldn't join a club just for the car-buying service, but if you're a member already, you'd be foolish not to take advantage of it," says Phil Reed, consumer advice editor for Edmunds.com. Warehouse clubs often pre-negotiate prices with local dealerships, cutting as much as 10% off the sticker price. AAA members might get a similar deal, and seasoned negotiators might be able to do better, he says, but going the club route gets you an offer much faster.

 

More on SmartMoney and MSN Money:

4Comments
Oct 12, 2011 11:56AM
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I'm an "executive" Costco member, and the fuel savings we get in our 2-car household almost pay for the entire membership.  We also save quite a bit on our auto insurance, and have found Ameriprise to have great customer service during those unfortunate times we've had to make claims.

I also buy our tires at Costco.  Their prices are fairly competitive with other tire retailers.  A minor gripe I have is they only carry pricier name brands, like Michelin and Bridgestone, and you can get better deals on more generic brands at places like Discount Tire.  But where Costco shines is their customer service after you've bought the tires.

We use Costco's optical department for our family's vision needs, and find this to be a much better deal than paying for vision coverage through work and needing to work with a traditional optometrist, which always involves hefty co-pays.

We get 2 rebates per year - once in February (cash back from what we've spent on the Costco AmEx), and once in August ("extra" cash back from being an executive member).  This is, of course, very dependent on your personal spending levels, but our August rebate alone usually matches what we pay for the executive membership (~$100).

Yes, via couponing and other methods, you can beat Costco's food prices at supermarkets and WalMart food centers if you put your mind to it.  However, we've found that the food quality at Costco is generally as good, if not considerably better, than WalMart and supermarket store brands.  Costco's meat section in particular is great - good prices, fine quality.

I will say that you can easily beat Costco's prices on things like books, DVDs, and similar items on the internet.  And you can often find better prices on larger electronics online as well.  But Costco's return policy is generous, and much more convenient than having to wrap something back up and schlep it to UPS to return it.

Plus, we just enjoy wandering the aisles at Costco every couple of weeks.  They've done a good job creating a "treasure hunting" atmosphere, which takes just a bit of the typical drudgery out of shopping.
Oct 12, 2011 3:49AM
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If you have a local grocery store that doubles coupons, you can get some really great deals check out websites like Coupons or the Printapons websites


Oct 12, 2011 10:05AM
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If you have storage space and a freezer, the paypack on those memberships fees can come from one large household shopping trip.  There are many many examples of getting two items or one twice as large for the same price as the local grocery store.
Oct 12, 2011 9:10PM
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You can save money by waiting to join until you need a big ticket item.  My husband and I joined Sam's Club about 6 months ago because we found a great deal there on a California king sized memory foam bed and platform (for hundreds less than anywhere else) for sale on their website.  So we got a great bed (wiht a 10 year warrantee) for a great price, and we got a membership besides.

 

We plan to stock up before our membership runs out and then wait at least 6 months before we renew.   

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