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Dec 2, 2009 07:41 AM

Avoiding the Costco yearly fee and other tips?


A segment on GMA this morning said that if you buy a gift card through a friend to you can shop at Costco using that card without paying the yearly membership ... one of the two reasons I refuse to shop at Costco.

Paying a store for the priviledge to shop annoys me to no end.

The other tip was anything ending in 97 cents was a clearance item and as low as the price will get.

The other reason is I don't shop there is that my household has never exceeded two and Costco and two people is like an Easter ham ... too, too much for two.

That being said, my three stepchildren are moving in next year, so I might re-think Costo if I have eliminated my two barriers to shopping there

I know there are a gazillion endless threads about Costco favorites ... but here's the real question ... do you REALLY do major food shopping there. I'm a extreme bargain shopper at food markets ... what food products are so great that you buy them every week.

I mean ... all politics aside ... I can get milk at Wal-mart for $2.20 a gallon and right now I have coupons for 40 cents off. Another store had a sale for the large Quaker Oats at $1.50 and I had a coupon for $1.00 off.

Also there is a super bargain market near me, Grocery Outlet where I can fill in the blanks with major deals ... $1.49 for 32 ouncesof Lascco herring in sour cream recently ... Yoplai, Oskos, Brown Cow, etc yogurt for 25 to 33 cents each ... Haagen Daaz for $1.49.

Is Costco worth my time and for what?

Also is there anything there that is so mind-blowing delicious that I can't get it easily elsewhere?

  1. Depends on what your time is worth going to all those other places. You can do better on food items by smart shopping elsewhere.

    1. Not every store is meant for every person. Nobody HAS to shop at Costco but a great many choose to do so because there is value in shopping there. We've been members for years and shop regularly (nearly every week). We've gone from being a family of four to a family of two and continue to find value in the relationship. As far as the "giant drum of mayonnaise" concept of warehouse stores goes, that's no longer the case. Yes, there are still certain items in #10 cans, but not many. And their #10can of San Marzano tomatoes is cheaper than the "large" can at other grocery stores. Most products are regular-sized but come in multi-packs (e.g. box of 3 frozen pizzas, 2-pack of olives in jars). We also entertain a lot and Costco is invaluable for summer barbecues. We've purchased tires for our cars there for years, also at great savings. We've rented cars with the Costco discount. As for sharing memberships, my older son and his college roommate shared a membership for a couple of years while at school. You don't need to have the same last name on your cards, 2 friends can always share a membership. And if 2 kids on a college budget found value at Costco, then pretty much anyone can.

      As far as the fee goes, that's how Costco stays in business. 2/3 of their profits come from fees. We have Executive membership which gives us 2% back on all our purchases. We've come out even or ahead on fees for every year we've been members.

      1. We belong to BJ's and I find that shopping the sales at other grocery stores is a better deal than shopping at Costco or BJ's. Sure it's good in a pinch but when I have to buy three items at a time it isn't, especially when I know that item goes on sale cheaper someplace else fairly regularly.
        Whenever we go, we make a list of what we need and stick to that list, if not we could wander the aisles all day and spend way too much money on things other than food.

        1. I shop at costco mainly because of their cheese,naked juice and organic carrot juice. There is only two of us and we have been shopping at costco for years. I just bought a delicious aged gruyere for only $10.99/lb and I make sure to stock up on this. Also they have chanterelle mushrooms for only $9/lb. Even Eric Ripert admitted there are some good stuff at Costco.

          1. Jfood has been a member of Costco, Price Club or BJ for >15 years, so yes he thinks it is worth the fee. But if you are planning on using the store please join versus scamming the system with the "my friend bought me this gift card," not cool.

            Jfood buys (food related only since the Mods normally request this).

            salad mixes, tomatoes, diet coke (although that will stop soon), bottled poland spring water, pelligrino, frosted flakes, laughing cow cheese, snacks for adult parties, some cheeses, coffee, tea, splenda, dishwasher detergent, dish detergent, kitchen paper towels, G2, barilla pasta, onions, chicken stock, salmon. He shies away from the shell fish that comes from Viet Nam as well as the ground beef that seems to have water injected into it. The pepperoni pizza is enormous for $10 and can probably feed your kids.

            Only you can decide the opportunity cost of your time.

            27 Replies
            1. re: jfood

              They just started stocking a mascarpone based salmon spread that's pretty damn good.

              1. re: ferret

                jfood tasted theother smoked fish spreads they had a few weeks ago and they were pretty good as well. Unfortunately they made the mistake of giving samples on triscuits which were way too salty.

                1. re: jfood

                  To the OP: sounds like you're dedicated enough to hunt down the best deals in town, and so you should.

                  As to food items which are available at Costco and nowhere else, 2 words: prime steaks!

                  As an illustration (personal results may vary), a few years ago, they had absolutely fabulous cara cara oranges... $4 for an 8lb bag I think. Whole foods had poorer quality ones for $1.50 for EACH ORANGE!! Other stores had them for as low as $0.50 per orange, but the quality didn;t even come close.

                  But nobody can force you to do anything... especially if you have such strong feelings against the place... may be better for your peace of mind to shop elsewhere.

                  1. re: caliking

                    Yeah, I was hoping that with more people in the house I might look at Costco differently or since I've been out of the loop so long that there might be amazing stuff there I could use.

                    I know about the steaks, but I don't eat beef often. I'm in the middle of fruit wonderland where I can buy good quality cara caras for 69 cents lb in season. The current post "Meyer Lemons - 20 for $7.00 at Costco" to me is jaw dropping because that is really, really expensive for Meyers in the SF Bay Area.

                    At one time I felt strongly against TJ. My big problem there is getting attached to items that get discontinued. However, reading Chowhound posts I got some insight into TJ that I didn't have before and have come to value it.

                    I was hoping to get that from this thread but the digressions unfortunatley that isn't happening.

                    1. re: rworange

                      I can say as a 2 party household with 2 cars, that the gasoline alone is worth the membership not to mention tires that no one could beat them on price, also an HP printer, Dell laptop that Dell was even higher priced on. I haven't even mentioned food yet. Lastly, cash back if you use their AMEX card.

                      1. re: rworange

                        As people tend to say here, ya gotta do your research. Here's a place to start. (Yes, it's long but ya gotta walk the walk!)


                2. re: jfood

                  >> But if you are planning on using the store please join versus scamming the system with the "my friend bought me this gift card," not cool.

                  I guess you should take that up with Good Morning America where I got the tip

                  "If you want to avoid paying the $40 or $50 annual fee, pay a friend to buy you a warehouse club gift card. Then you can shop to the card limit without paying any surcharges"

                  1. re: rworange

                    Great idea RW, jfood wished he would have thought of that. So he took your advice and posted the following on the comment part of the link you provided.

                    "All I can say is how despicable. How deep into the gutter does ABC wish to go in its presentations on GMA. The idea that GMA is giving advice on how to scam the system on avoiding fees that businesses charge is disgusting. Are you next planning on give advice to avoid taxes? Costco has established a for-members model. Your description on using a friend to gain entrance to avoid the membership fee that others have paid is in a similar vein to advising on insider trading…hey who gets hurt? Well as a person who has paid his membership fee annually for years that answer is I have been hurt as well as every other member who has paid. Why should I wait in line behind a scam artist? Why should I potentially not be able to purchase an item because it is sold out because some low-life used their friend to circumvent the internal business model? Ideas like this should never be espoused on a reputable show and you have dragged yourself through the gutter and into the sewer by describing a means to get something for nothing. I can’t wait to see your piece on how to steal cable signals.

                    Bad, bad job ABC and GMA. "

                    1. re: jfood

                      Thanks for taking the high road, jfood. I think it's pretty astounding that they took their huge audience and taught them how to bilk an organization. Costco seems to have an excellent business model including treating their employees well. Wretched to teach people how to cheat.

                      1. re: jfood

                        If you really want to shop at Costco and don't want to pay the high membership fee, ask your friend to add you to their card and pay them the extra member fee. That isn't scamming as it is a Costco offer. I had a second person on my card who no longer lives in my house and who never goes to Costco on their own. I will change over the extra card to whichever of my friends wants to pay half my card. I don't thnk I end up saving much money at Costco during the year with the cost of the card but I do enjoy it as entertainment and I also do find some things that aren't available elsewhere or are much better quality for the price.

                        1. re: susanl143

                          The Card is for a "household" not a friend. This allows two members of a single household to each have a card in their wallet so they can shop independently. It is NOT a 2-1 deal.

                          From the Costco Website:

                          "Gold Star Membership

                          Gold Star Membership is available for individuals who do not qualify for a Business Membership. The Gold Star Membership is $50 per year, which includes one household card per primary add on. See the membership counter at your warehouse for additional information, or call us at 1-800-774-2678."

                          Hope that clears the confusion.

                          1. re: jfood

                            Jfood, Costco allows the purchase of another card(s) that is beyond the complimentary family member card. For a $25.00 fee per card (annual), I have added my adult children to my and my wife's membership.
                            I'm pretty sure that's what susanl is talking about as she references a card fee.

                            1. re: hannaone


                              Not according to Costco.

                              The Gold and Executive cards allow for 2 cards within a household. There is no ability to add a 3rd or non-household person to the card (Jfood wishes there was a way). On the Business card you can add people for a $40 annual fee for an additional 2 cards. Someone goofed when they added your children.

                              And the use of the word "split" leads jfood to a different conclusion on S's post, plus you are supposed to bring proof of residency when the second card is issued so the "same household" requirement is met.

                              1. re: jfood


                                I'm a business member with an executive bump....I have my primary executive card with a free spouse card, a business card anyone can use and an additional eight family and friends who have cards off of my membership. I believe it's four additional paid fees and four free spouse cards, for a total of 11 cards. It's been that way since I joined way back in 1994.

                                1. re: fourunder

                                  Yup for a business card you can include numerous employees and the annual fee for each of them should be $40 that entitles them to the same 2/household cards.

                                  If you start with a Gold Membership (non-Business) you do nat have the same privileges of extra non-household members, onlythe Business card does.

                                  Sorry for the confusion.

                                2. re: jfood

                                  That might be what I'm thinking of as my membership is business/executive. And I misprinted - the additional card fee on my last statement was $35.00 for the additional cards.

                                  1. re: hannaone

                                    When jfood's mm had a card at Price Club the annual fee for her and jfood on her small business' membership was $25 back in the 70's. You should expect to see the $35 go to $40 on the next renewal.

                        2. re: rworange

                          In the greater sceme of things, Costco probably views the gift cards as a way to get new faces into the store. And at that point, said new faces will discover that the store has enough to offer that they'll convert a decent percentage of the new faces into paying members. The GMA approach also requires an extra step on the shopper's part and the shopper may decide their time and effort are better spent just going ahead and buying a membership.

                          I'm sure that the company isn't thrilled that GMA is encouraging it as a workaround to member fees, but if it really wanted to stop it, it could simply change the rules and say that future gift card users do pay a surcharge if they aren't a member if they feel like the membership conversion rate from the GCs falls to an unacceptable level.

                          1. re: beachmouse

                            Exactly, beachmouse

                            Costco displays this policy clearly on its webstie. It is at the top of the info about the Cash Card
                   card&Mo=2&cm_re=1_en-_-Top_Left_Nav-_-Top_search&lang=en-US&Nr=P_CatalogName:BC&Sp=S&N=5000043&whse=BC&Dx=mode+matchallpartial&Ntk=Text_Search&Dr=P_CatalogName:BC&Ne=4000000&D=cash card&Ntt=cash card&No=1&Ntx=mode+matchallpartial&Nty=1&topnav=&s=1

                            "You must be a Costco member to purchase or reload Costco Cash Cards. Members and non-members may use the cash cards to shop in the warehouse or online. Costco Cash balances may be used toward membership or merchandise. "

                            There are certain sections Costco has determined it is ok for them to allow non member to participate such as the pharmacy.

                            Back to my original usefulness to me query. I was amused to see a casket section A family member died recently and I did some comparison funeral shopping. Turns out I can even get the same cost for caskets locally. It was on the husband's side and not someone I knew that well which is why I was emotionally able to be the shopper.

                            1. re: rworange

                              When my dad died in 2005, the Costco casket ended up being $200 less than the Funeral Home price. But membership and delivery had to be within the same state (some sort of fine print/law) and it wasn't worth dragging my mom down to Costco to get her a membership in the middle of all of what was going on.

                              1. re: rworange

                                Federal law they must allow the general public access to use the pharmacy, not a policy.

                                1. re: rworange

                                  "There are certain sections Costco has determined it is ok for them to allow non member to participate such as the pharmacy. "

                                  WRONG>>>Costco didn't decide this, the state licensing authorities did. In Connecticut, the state licensed departments: Pharmacy, Liquor, Optical, Hearing Aids, MUST be open to the general public.

                                  However, there are pricing adavantages to memebers, even in these departments. Costco gives an additional discount on prescriptions to its memberss who do not have Rx insurance. Two years ago, our greyhound was dying of kidney disease. The generic drugs she needed were $97 at Walgreen's and $9 at Costco. The pharmacy counter assisant asked me if Bailey has Rx insurance when I went to pick up the drugs. I replied no, and was given a special discount card to cover Costco Members without RX insurance. This brought the cost down to $7.34.

                                  I do not have Rx insurance at this time. I still use the extra discount card.

                                  I also buy my eyeglasses at Costco. I wear progressive bifocals and can get a complete pair with frame for $139. The cheapest I can find them elsewhere is $289.

                                  This alone makes membership worthwile, nevermind the actual food and other shopping.

                                2. re: beachmouse


                                  Here are the words from the GMA wesite,

                                  "If you want to avoid paying the $40 or $50 annual fee, pay a friend to buy you a warehouse club gift card. Then you can shop to the card limit without paying any surcharges."

                                  This is basically espousing unethical behavior with the use of the word "avoid".

                                  Your idea of the surcharge for non-members is a very good one and already used by their on-line division. The other point is that the "gift card user" cannot use the card for multiple scamming entrances. If they have a card they cannot buy $100 of items, use the card for $1 and pay cash for the other $99 therefore giving them additional antrances. the card has to be fully used before cash is accepted.

                                  1. re: jfood

                                    On top of that, they're implicitly encouraging mooching off your friend, who is paying the membership fee. Should your friend have to shoulder the burden of your desire to shop at a wholesale club without paying dues? The idea of paying your friend doesn't really make it any better, just more awkward.
                                    If a friend made a habit of asking this of me, I'd make a habit of not answering their phone calls and e-mails.

                                    1. re: jfood

                                      You can avoid income taxes by donating money to charity. You can avoid auto accidents by driving carefully. You can avoid insufferable conversations by not inviting boors to your parties. Are all of these behaviors unethical because you're "avoiding" something?

                                      Costco has a policy in place. It publicizes that policy. Some people will take advantage of it, others won't. If it isn't helping Costco accomplish its business goals, the policy will change. I don't see an ethical issue, any more than I see an ethical issue with people making a meal of the sample cart offerings. It may be crass, but it's not unethical.

                                      1. re: alanbarnes

                                        If Costco wants to close that particular loophole they will. Taking advantage of the rules, whether they are Costco's, the IRS or the airline you fly is consumer smarts.

                                        I recall when one of the early airline mile cards offered said miles for the purchase of traveler's checks. Some smart people realized they could buy them and deposit them into their bank and then pay off their credit card bill - and get a whole lot of free airline tickets in the process. Smart consumers. The credit card company then closed that particular loophole after they realized what they had created.

                                        1. re: alanbarnes

                                          as they say there is a difference between the letter and the spirit of the law.