Black Friday Shopping: Are Membership Stores a Good Option?

Black Friday, Shopping
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Looking to save by buying in bulk? Membership-only warehouse clubs like Costco, Sam’s Club and BJ’s Wholesale give shoppers the opportunity to save by stocking up on low-priced foods, household supplies and electronics. And besides everyday shopping, warehouse clubs are also popular destinations for Black Friday shopping.

Should you turn to your local Costco, Sam’s Club or BJ’s when the shopping holiday rolls around this year? Here’s a look at the benefits and drawbacks of shopping wholesale on Black Friday:

Benefits: Prices, Cash Back, Extra Services

The primary benefit of the warehouse club for everyday shoppers is that it offers significantly lower prices than the largest supermarket chains.

A family that spends $150 a week at a conventional supermarket, for example, can save $2,270 a year shopping at BJ’s, $2,344 at Costco and $2,571 at Sam’s Club, according to a Consumers’ Checkbook survey published by the nonprofit Center for the Study of Services.

How do these deals translate to Black Friday’s sales? The shopping holiday is another opportunity for members to snap up great deals offered at the warehouse clubs.

Like other stores with broad inventories, Black Friday deals at these retailers can primarily be found in the electronics department, alongside some good prices on household appliances and supplies for the home.

Last year, Costco offered $100 off on the Samsung 10.1-inch Galaxy Tab 3 and $200 off on the HP Envy Touchsmart 15.6-inch laptop with Beats audio. In the camera arena, the retailer priced the Panasonic ZS25 20x Digital Camera at $179.99 instead of $249.99, and the Nikon P520 Long Zoom Camera at $299.99 instead of $449.99.

Costco shoppers this year can expect to find the Samsung 50-inch class 1080p smart LED LCD HDTV offered at a $200 discount. The Acer V3 series 15.6-inch touch laptop will be $120 off, while the Samsung 10.1-inch Galaxy Tab 4 tablet will be marked down $100.

At Sam’s Club, customers can save $100 on the Apple iPad Air (16GB) and pick up an iPhone 6 (16GB) for only $99 with a two-year contract. The popular 7-inch Samsung Galaxy Tab 4 will be available for only $149, while its 10.1-inch cousin is priced at $249.

Other discounts at Sam’s Club include a KitchenAid 14-piece stainless-steel cutlery block for $39.98 and the Blendtec total blender with WildSide jar for only $349.

BJ’s hasn’t released it Black Friday ad yet for this year, but last year’s ad featured 24 pages and more than 150 deals. Among the best products, the Canon PIXMA MX722 wireless all-in-one printer sold for $79.99. Sony noise-cancelling headphones cost only $24.99, and the Shark lift-around pod vacuum was priced at $49.99.

The BJ’s ad also offered two pages of instant coupons, and highlighted a “buy one, get one free” offer on select food products.

Beyond low prices, warehouse clubs also offer their members cash-back programs that let them earn back the cost of membership.

At Sam’s Club, members can earn $10 for every $500 in qualifying purchases, up to $500 annually. The reward can be redeemed for cash or used toward purchases or membership fees.

With executive membership, Costco’s highest level of membership, shoppers can earn 2% back annually up to $750. For non-executive members, the Costco store credit card also offers rewards, including 3% back on Costco gas.

At BJ’s, members of the Perks Rewards program can earn 2% on most purchases, while holders of the Perks MasterCard can earn up to 5% back.

Other membership benefits include access to extra services, like the retailer’s pharmacy, gas station or tire shops. Filling up your tank at Costco, for example, is regularly cheaper than purchasing gas at standard gas stations.

Drawbacks: Fees, Fewer Credit Cards, Fewer Choices

Despite the advantages, warehouse clubs aren’t for everyone. Membership fees can be a major deterrent for shoppers who don’t plan on making frequent purchases.

BJ’s annual membership fees can cost $50 to $100, and Costco membership is $55 or $110. At Sam’s Club, members pay $45 to $100 a year, although military personnel and college students are eligible for a discount.

At the same time, some members may feel compelled to shop enough to “earn back” the cost of membership and end up purchasing more items than they in fact need or can use before expiration.

Furthermore, warehouse clubs often accept a more limited selection of credit and debit cards. For example, Sam’s Club warehouses take only MasterCard and Discover, leaving Visa and American Express cardholders out of luck. At Costco, the only credit card accepted is American Express. (Both retailers offer their customers more options when shopping online, however.)

And finally, you’re not going to find as broad of an inventory at Costco, Sam’s Club and BJ’s that you might at retailers like Walmart, Safeway or Target. Compared with the average supermarket, which carries 50,000 items, BJ’s has about 7,200 items, Sam’s Club has 4,900 and Costco has 4,000, according to Consumers’ Checkbook. The average Walmart, on the other hand, carries 100,000 items.

This relatively small selection can be seen in Black Friday offerings as well.

You’ll find shorter ads (12 pages for Sam’s Club this year and only five for Costco) featuring fewer products.

For example, Costco offered $100 off the Dyson DC50 multi-floor-plus bagless vacuum last year. At Kohl’s, on the other hand, shoppers could choose from the store’s entire collection of Dyson floor care, which received a 33% discount across the board.

If you’ve had your eye on a specific product model, size or color, you may want to reconsider making your local warehouse club your only Black Friday destination, as you’ll be more likely to find it at your run-of-the-mill retailer than Costco, Sam’s Club or BJ’s.

Conclusion: Consider the Big Picture

Membership is worth it if you plan to shop regularly, making the upfront cost pay off in the end. Do not, however, feel compelled to purchase more than you need, since this will end up costing you more in the long run.

If it’s only Black Friday deals drawing you to consider membership, you may want to put down your pen before you sign an application. The cost of membership is unlikely to make even the best Black Friday deals worth it for you, so instead tag along with a friend or family member who already has membership and can make the purchase for you.

But if you’ve been looking to cut down on your weekly grocery costs, membership to a warehouse club can be a great way to rack up savings. By signing up now, you’ll have access to Black Friday discounts by the time the sales kick off.

Written by Melinda Szell

 




 

Costco image via Shutterstock