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Is it worth it to shop at Costco?

Tuesday - 8/19/2014, 11:56am  ET

Costco (Justin Sullivan/Getty Images)
A Cheapism survey looked at if it was really worth the money to shop at Costco. (Justin Sullivan/Getty Images)

Tips for shopping at warehouse stores

Scott Gamm, The Street's personal finance contributor

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WASHINGTON -- Warehouse stores such as Costco can offer great deals for shoppers, but many people are left wondering whether shopping there is worth their money.

Scott Gamm, a personal finance contributor to TheStreet.com, says there are some pros and cons with shopping at warehouse club stores and ultimately shoppers have to be smart about their purchases.

Gamm says in the end it's all about the numbers. A study from Cheapism compared the cost of 19 products most families would purchase -- items such as a Roku 3 streaming media player, a cookware set, Huggies' diapers, tomatoes and a girls' Speedo swimsuit -- when bought at Costco versus convention retail stores.

The study found the Costco membership does pay off and saved almost $400.

"Whether you're buying in bulk or you're buying an electronic -- a vacuum cleaner, a TV, you're going to save some money by going to Costco," Gamm said Tuesday on WTOP.

Costco boasted a 25 percent savings in the study. Costco's total cost for all 19 items was $1,165 compared to $1,557.28 at retail stores.

But there are some negatives with warehouse club shopping, Gamm notes. Buying in bulk, which is typical at most of the warehouse stores, can be wasteful.

"People were worried about shopping at places like Costco because the sizes of items are so big that they winded up wasting them and having to throw out stuff," Gamm says. "It's certainly never wise to pay for stuff you're not going to use."

Gamm advises shoppers to consider the family's size and consuming habits when going to warehouse stores. He says while shoppers may pay less for 10 pounds of apples at Costco ($8.99 versus $17.90 at Kroger), it makes no difference if they go bad before they are eaten.

And what about the membership costs associated with warehouse stores? Gamm says the fee is still worth paying.

"With the savings, it really only takes one large shopping trip to recoup those costs," he says.

Costco, for example, has a minimum annual membership fee of $55. Sam's Club's minimum annual membership fee is $45.

Gamm has some tips for people considering warehouse shopping:

  • Be selective. Don't go to warehouse stores for every item on the list.

  • Shop realistically. Only buy what you know you will use and need. Food that spoils won't save any money.

  • Create a combination. Use warehouse stores to complement your purchases instead of replacing specific stores.

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