5 Reasons Not to Renew Your Costco Membership
A Costco membership is an extra expense, so it's wise to ensure it's still worth the cost before you renew. Find out why you may want to avoid renewing.
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Many people rave about shopping at warehouse clubs like Costco. Getting a deal on bulk goods and other household essentials can be a win for your wallet. But a Costco membership isn't right for everyone. In fact, for some, it could be a waste of money.
If you're trying to decide whether it's worthwhile to continue renewing your membership, you're in the right place. Here are a few reasons to refrain from renewing your membership.
1. You no longer live or work near a club
Being a Costco member makes sense if you live or work near a club. You can shop there frequently without wasting time or gas. However, if your situation has changed since joining, and you no longer live or work near a club, you may want to reconsider renewing your membership. If you enjoyed the benefits of shopping at a warehouse club, see if there's an alternative club in your community, like Sam's Club or BJ's Wholesale Club.
2. You're not getting your money's worth
If you're paying for a membership but aren't getting your money's worth, it may be time to say goodbye to your Costco card when you're up for renewal. It costs money to be a member, and you want to ensure you're getting value from your investment.
How can you determine if you're getting your money's worth? Consider how much you spent on your annual membership and how much you're saving every time you shop at your local club. For example, a Gold Star membership costs $60 a year.
Let's imagine you go to Costco a few times a year and buy ten bags of 40-pound dog food throughout the year. Costco sells its 40-pound bag of Kirkland Signature Adult Formula Chicken, Rice, and Vegetable Dog Food for $49.99. A 40-pound bag of a similar product, Purina ONE Plus Dry Dog Food for Adult Dogs, Real Protein Rich Natural Chicken & Rice Formula is sold at Walmart for $60.48.
You'd pay $604.80 for 10 bags at Walmart or $499.99 to buy 10 bags at Costco. That's a savings of $104.81 a year. Considering your Costco membership costs $60, you'd get your money's worth. You'd likely use your membership perks to pick up at least a few other essentials every time you shop, resulting in even more savings.
But if you're not seeing the savings add up and aren't saving more than $60 a year, it may not be worthwhile to continue being a member.
3. You're throwing away food
Many of the food items sold at Costco are sold in large packages. If you live alone or with only one other person, finishing all the food you buy from Costco before it expires can be challenging. The savings you get from shopping at Costco are no longer a win for your wallet if you throw away spoiled food. Buying food at other grocers may help you avoid food waste.
4. You can no longer afford the annual membership fee
You may want to skip renewal if you dread paying your annual membership dues because of the cost. Spending $60 or $120 yearly to shop at Costco is an investment. But if this expense no longer makes sense for your budget, that's OK. Instead, consider shopping at other low-cost retailers like Aldi. You don't need a membership card to get the best deals.
5. You're spending beyond your means
Another reason you may decide not to renew your membership is because you're overspending. Many shoppers keep more money in their checking accounts by shopping Costco deals. But it can also be tempting to overbuy at warehouse clubs. Limited-time sales or new products may entice you to spend beyond your means, especially because of the affordability and uniqueness of the products offered.
If you're not careful, extra impulse buys can add up quickly and create financial stress. If you're spending more than you can afford, it may be time to stop being a Costco member. Otherwise, your shopping habits could negatively impact your wallet.
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We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and Walmart. The Motley Fool has a disclosure policy.
