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There’s a reason some people choose to join Sam’s Club instead of paying for Costco. It’s cheaper.
Right now, a basic (Gold Star) Costco membership costs $60 per year, but that price is rising to $65 on Sept. 1. And an Executive membership at Costco that comes with 2% cash back on purchases costs $120 today, but will cost $130 next month.
At Sam’s Club, you’ll pay just $50 for a basic membership and $110 for a Plus membership that offers cash back. This means that in just a few weeks, there will be a $15 difference in cost for the basic membership and a $20 difference in cost for the upgraded membership.
So it’s easy to see why Sam’s Club might seem like the better bet. But here are three signs that a Costco membership might be better for you.
1. Costco is closer
The money you save by joining Sam’s Club over Costco at a lower price point could easily be negated by the extra money in gas you have to spend to drive a longer distance. If Costco is closer to where you live than Sam’s Club, not only might you be spending extra to get to Sam’s, but you’re inconveniencing yourself.
Remember, the best way to get great value out of a warehouse club membership is to shop there often. If you’re looking at a 10-minute drive to Costco vs. 30 to Sam’s Club, then Costco should be the obvious winner.
2. Costco’s inventory better fits with your shopping needs
Both Costco and Sam’s Club stock a wide range of inventory. But if you’ve found that Costco tends to check more items off of your personal shopping list, then it’s worth paying extra for the membership.
Remember, the $15 or $20 difference in membership cost is one you’re paying for an entire year of access. But if Costco stocks more of the items you need, you might save $20 on groceries every month at Costco, vs. only $10 at Sam’s Club. After 12 months, the Costco membership will end up offering far more financial benefit in this case.
3. Costco offers more store brand items than Sam’s Club
Both Costco and Sam’s Club have a store brand. Costco’s is Kirkland Signature, and Sam’s Club’s is Member’s Mark.
But you’ll generally find a wider range of Kirkland items than you will Member’s Mark items. And that could lead to extra savings.
Costco specifically prices its Kirkland products at least 20% below name-brand counterparts. So when you buy something with the Kirkland label, you know you’re getting a nice amount of savings.
You might enjoy great savings with Member’s Mark, too. But if you have fewer product choices there, you may not save as much.
There’s nothing wrong with joining Sam’s Club over Costco if it’s a better fit due to factors like location and hours. But don’t rush to choose Sam’s Club over Costco for the lower membership fees alone. You may find that Costco helps you save more money despite the higher cost to join.
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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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
