Many see the membership costs and the benefits of warehouse clubs and wonder if joining is worth it. The bargains, especially for families that need to buy in bulk, are compelling. However, people often wonder if the cost of membership justifies the savings. Annual memberships start at $60 at Costco, $45 at Sam's Club, and $50 at BJ's Wholesale Club. Fortunately, under some circumstances this decision is easy:

You live nearby

Proximity is a driver, especially when the club sells gasoline. According to Automotive News, the average household consumes 1,011 gallons of gasoline per year.

Warehouse clubs charge 6 to 12 cents less per gallon than local averages, according to the Christian Science Monitor. If we split that down the middle and assume a 9-cent per gallon savings, buying gas at warehouse clubs can save the average household $91 per year. The annual membership fees at Costco, Sam’s Club, and BJ’s Wholesale are well under $91. Keep in mind; gasoline represents only one of thousands of items sold at warehouse clubs. Also, be sure to budget time as these stores close earlier than most retailers, and some are closed on holidays.

You prefer buying in bulk

Large families and even single people that consume large amounts of certain items would likely benefit Buying In Bulk.

Buying from a warehouse club can save anywhere from 10-60 percent off of their traditional retail counterparts.

One important budgetary category is groceries. According to the Bureau of Labor Statistics, the average family spent $4,000 per year on groceries in 2013. Let’s assume the average family spent half of that at a warehouse club, $2,000 per year.

For the sake of simple math, if we assume warehouse club shopping cut costs by one-third, this family would receive $3,000 worth of groceries for $2,000. Again, this figure greatly exceeds the cost of the membership.

You're disciplined with credit cards

One creative way to finance club membership fees involves club credit cards.

For example, Costco gives a minimum of 2 percent cash back on any items purchased at Costco. Hence, spending $3,000 per year at Costco on their Credit Card covers the cost of the membership. Since gasoline purchases return 4 percent cash back, that minimum spending limit amounts to $1,500. In contrast, the Sam’s Club card pays only 1 percent back, so one has to spend $4,500 on the card to cover the membership cost. However, with its 5 percent cash return on gasoline, one can cover the membership cost with only $900 in gasoline purchases!

These cards apply to all purchases at the warehouse club. If one can cover the membership cost on gasoline purchases alone, using their credit card represents a clear winner for the consumer.

However, with this strategy, credit card discipline is key. Only people who pay off the credit card balance every month will benefit. Paying credit card interest can easily destroy any savings earned by using this strategy.

Brand Loyalty

Warehouse clubs carry major brands. Hence, if one like Pace Picante sauce or Coors Light beer, they’ll save a few dollars every time they restock on their favorites. Even at Costco with the higher membership, brand loyalty on just a few brands would easily get them past $60 in annual savings. With Costco at least, their brand is only available at that store. Kirkland Signature brands on everything from coffee to golf balls to shoes have become popular. For those that love Kirkland Signature products, the Costco membership obviously pays for itself.

Additionally, they can offer unexpected discounts, such as a recent deal on smartphones offered by Sam’s Club.


Deciding whether or not to join a warehouse club is a difficult decision for many families. For those that usually do not want or need bulk items, membership could appear to offer little value. However, for those that prefer bulk purchasing or certain brands, a warehouse membership makes perfect sense. Also, if one lives near a club that sells gasoline and shows discipline with a credit card, the benefits will exceed membership costs. Warehouse clubs are not for everyone, but if one fits the above criteria, they should apply for membership, and if disciplined, a credit card today.