Jonah Lehrer wrote a brilliant little article about Costco over at the Science Blog. An excerpt:
The secret of Costco’s success – and the reason I’m willing to pay just to enter the store – is because I trust the company to give me a good deal. As a result, I don’t comparison shop on my phone when I’m browsing the Costco aisles, checking to see if I can get the same book, or sunglasses, or toothpaste for less on Amazon. My usual cheapskate anxieties have been quieted.
And then, later:
And this is where all those details of the Costco shopping experience make us more likely to spend money. The bare bones warehouse aesthetic, the discounted house brand, the constant reassurance that we’re paying “wholesale” prices – it’s all an effective means of convincing us to not worry so much about the price tag. As a result, we’re able to focus entirely on our anticipated pleasures, which is why I walk out of the store with all this stuff I don’t need.
Quite often in the past, I’ve discussed the advantages of shopping at warehouse clubs. I currently have a Sam’s Club membership (it’s the only warehouse club anywhere near my home) and have visited Costco several times in the past – the shopping experience is almost identical.
What I’ve learned is that almost always, you do save money when you shop there, but only if you buy things you would buy normally anyway.
Of course, that’s not where the profit lies for a warehouse club. If they earn a return on every item you buy, then they make a larger profit. It’s business 101.
Thus, the store is often set up to encourage you to buy more. They already have the psychological benefit of the idea that the stuff there is inexpensive – and it often is – but that often convinces people that things are a “deal” there and that they don’t really have to look at the price tag or think about whether they really need the item at all.
Take, for example, my last visit to Sam’s Club. I went there merely to buy Pull-Ups for my daughter. By the time I neared the checkout, I had several items in my cart – a paperback book, a large container of grapes, a two-pack of my son’s favorite fruit juice, and a few other odds and ends. Once I thought about each of them for a little while, I realized I didn’t actually need most of them – I was only buying them because I wanted them, thought they might serve a use for me, and believed the price was good. So I put them back and left only with the Pull Ups (a big win, in my eyes).
What can you do to avoid falling into this trap and spending more than you should on “bargains” (that aren’t really bargains at all if it’s not stuff you really need)? Here’s how I usually work it.
I don’t go in there without a shopping list. I know what I’m there to buy the second I walk in the door. The trip has a very specific purpose – I’m getting the items on my list and nothing else.
I don’t even go down aisles that do not contain items on my list. Wandering is the enemy of frugal shopping, because you always see something you “need” that’s a good “deal.”
I re-evaluate everything in my cart as I approach the checkout. I look at every single item and ask myself if I actually need it or even want it that badly. Does it really serve a purpose in my life? Is that purpose worth the cost?
I usually shop with a buddy. That buddy is usually my wife. We talk ourselves out of an awful lot of frivolous purchases, which saves us both money. A good shopping buddy is someone who talks you out of stuff and doesn’t talk you into stuff.
Warehouse stores are great tools for minimizing your grocery and household budget, but you have to be careful not to give into impulse buys, which warehouse stores make so easy. Good luck.