Worst Warehouse Club Buys

By Ken and Daria Dolan, Dolans.com

posted: 123 DAYS 3 HOURS AGO

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Jamie Koslow, AOL

Membership in warehouse clubs like Costco and Sam’s Club has doubled over the last six years. No wonder we can never find a parking space!

Most new members join a warehouse club in order to save money. After all, prices on many of the items are pretty hard to beat. Warehouse clubs generally operate on much tighter margins than other "discount" stores and supermarkets, enabling them to offer much lower prices.

But that doesn’t mean everything’s a bargain. While you can find many great deals at warehouse clubs, you can’t assume that every price is lower than you could get elsewhere.

Below, personal finance experts Ken and Daria Dolan of Dolans.com warn you about some warehouse buys that might not be such bargains.

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We love shopping at our local warehouse club. We recently told you about some of the top warehouse club bargains. Some of our favorite items to buy include wine, olive oil, meat and vitamins.

But we've also made some purchases we later realized weren't such a good deal. You cannot let your guard down when it comes to being a diligent shopper!

Before we get into details on some items you might be better off buying elsewhere, remember two warehouse shopping basics: Always compare prices before you buy, and make a list just like you do for the grocery store and stick to it. And steer clear of impulse buys!

Here are some of the items you should think twice about buying the next time you visit the warehouse club:

Gasoline

When gas prices are falling, warehouse clubs offer some great prices. But when gasoline prices are on the rise, your warehouse club can quickly become a bad deal.

That's because warehouse clubs are among the first to reflect the increase in gas prices since the sheer volume of gas they sell requires them to replenish their supply more often than other gas stations. That rapid turnover means the more expensive gas gets pumped into the system very quickly.

Compare the price at your local service station before you buy at a club.

Fresh Produce

We have a few words of caution when it comes to buying fresh produce at your warehouse club.

First, if a fruit or vegetable is in season, you will likely find the same or better prices at your grocery store depending on that week’s sales. If you are lucky enough to have a farmer’s market, you can usually beat the warehouse club price on in-season produce.

Second, since produce is perishable and is sold in bulk, be sure you can actually eat all of what you buy before it goes bad.

Paper Goods

We compared the price per unit price on toilet paper and paper towels at our warehouse store and our local "big box" store (Target, Walmart, etc.). In both cases, the price at our regular retail store was the same as the warehouse price. And we didn't have to figure out where to store 48 rolls of toilet paper!

You can often find better bargains at your regular grocery or retail store on paper plates, paper towels, toilet paper and napkins -- especially if you have a coupon.

Jewelry

Be very cautious when buying jewelry at your warehouse club.

Even though some warehouse clubs will provide you with an appraisal showing that the jewelry is worth more than the "discounted" price you paid, many jewelry experts question those appraisals. As with any piece of jewelry you buy, be sure to get the quality of the item evaluated -- not all diamonds or gems are created equally -- and be sure to shop around.

Beware of "Gray Market" Products

Gray-market products include merchandise that was designated by the manufacturer for distribution in another country, but ends up being sold in the United States. Warehouse club stores often buy gray-market products, either because the goods are priced cheaply or because the manufacturer will not sell directly to the warehouse club.

Unfortunately, the warranties that come with gray products (some watches, for example) don't have to be honored in the U.S. Be sure to carefully check the warranty details on any product and the store's return policy on the item before you buy.

Products That Offer Coupons

Smart coupon shoppers save hundreds if not thousands of dollars a year.

Too bad most warehouse clubs don't accept any coupons except their own. If you are a diligent coupon clipper (or coupon "printer" these day with so many people finding coupons online), you may be able to beat warehouse prices by using those coupons at your grocery store.

This can be especially true on diapers, cereal and paper goods.

Designer Clothes

Don’t get too excited if you find brand name clothing at discount prices at your warehouse club. Most designers generate warehouse-only lines that may not be same quality.

Warehouse Store Credit Cards

Just because the warehouse club offers plenty of savings, doesn’t necessarily mean that the warehouse credit card does.

The interest rate on the cards we have seen is significantly higher than the average interest rate being offered elsewhere.

Big vs. Many

Just because an item is three times the size of the one you'd find in the supermarket, doesn't necessarily mean it's a bargain at the warehouse. In fact, many times that massive one gallon container of ketchup costs more than the shrink-wrapped bundle of six smaller ketchup bottles.

Not only can the multi-packs be the real bargain, they can also be much more convenient. Those smaller containers can be much easier to use, to store and to finish before they go bad.

In Conclusion

So keep finding great deals at warehouse clubs, just be sure you don't erase your savings by overspending on items you could buy cheaper elsewhere. Let us show you simple ways to save money at the supermarket and our top money saving web sites.

2009-10-06 13:02:35