Tag Archives: Costco

Costco Under Attack – But Why?

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Media stories, lead by the toxic wasteland of social media, have hammered Costco for the last month or so – for no valid reason.

Costco is, and always has been, a membership-required store. Anyone without a membership can go with someone who has one and shop. But no membership – no shopping. Seems pretty simple. However, when Costco implemented some self checkout machines, the non-members shopping there rose drastically. After all, there isn’t a cashier checking the picture on the membership. So Costco has implemented some random check at the self-serve lanes and that’s what set off social media. When that happened, TV, radio and others weren’t far behind – for no reason other than to amplify the stupidity of social media.

So, at the risk of stating the obvious, I’ll explain it again…to people who aren’t actually going to read this – or care about logic: I paid for a Costco membership – as did millions of others. THAT is what lets me shop there. No, you can’t take someone else’s and shop there. You can’t take someone’s pink card and think it’ll cover the insurance on your car. You can’t use someone’s membership and show up at a private golf course, or a friend’s drivers license and somehow think you’re good to drive with that. You may not believe this, but people pay for things in order to have, access or use them.

Go get a membership if you really want to shop at Costco. It’s not expensive or hard to obtain. Until then, let me see if you’re going to complain about any of the other examples (and hundreds more) I’ve listed or shut up about the stupidity of your social media campaign.

Sleeping With Walmart

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Late fall, the rollout of Sleep Country Canada stores into select Walmart locations started in Quebec. They’ve now worked their way to Western Canada with locations in Saskatoon, Lethbridge, Calgary, Edmonton, and Duncan, BC.

The express stores are around 700 square feet and may replace the hair salon, optometrist/eye glasses, nail salon or other smaller “stores” to make room. Sleep Country has around 300 locations and simply wants to expand their customer reach. Walmart is certainly the place to do that, so it seems like a win-win for both companies.

Mattresses, along with jewelry, certainly have enough markup to make them profitable, even after paying Walmart. When furniture markup is around 300 to 400% (compared to less than 10% for electronics) and mattresses are significantly higher than that, make sure you shop around. For over a decade, a national retailers has had a billboard on a busy intersection in Edmonton advertising 50% mattress sales. That’s not a sale – its re-establishing a lower (but still) retail price. That’s taught me to believe: 50% off is actually full sticker price.

Consumer Report is a good place to start your research. They’ve done testing on everything from $1,000 to $3,000 mattresses and found very little difference when cutting them open and comparing coil count and padding. In their opinion, suggested retail pricing is pure fiction and fancy phrases and brand names don’t justify the additional cost. Feel free to test-sleep them for a few minutes and shop around. If you have a Costco card and are looking for a new mattress, January is the month Costco carries them (as in: check it out right now) since it’s only a seasonal in stock item.

Why Overpay THAT Much?

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Loyalty is always a two-way street when it comes to the brands and the products we buy.

With some of the insane (and unjustified) price increases so far this year, loyalty to any one product can shred your wallet. That’s entirely unnecessary when there are normally substitutes that are just as good! I would estimate that there must be almost a dozen items that I’ve changed since the start of the year because of price increases of over 25%. Sorry, that’s not inflation – that’s taking advantage of the “everything is going up” resigned attitude to stick it to me.

Other items have always been less expensive, but brand-name companies know how loyal we are. Here’s a great example: I was loitering in the pharmacy area of Walmart two weeks ago waiting for a prescription. At the end of the aisle (companies pay for that prime spot) was a sale on Tylenol.

Costco 390 tablets for $22.99 = $0.059 per

While I stood there for about 10 minutes, at least a half dozen people walked by and grabbed one of the packages. Yet, right beside these, just not on the end-aisle were the no-name acetaminophen. Same product without the brand name!

Costco Kirkland Acetaminophen 500 tablets down to $0.016 per

They’re almost 350% cheaper! Yet nobody reached the two feet further to save three and a half times the money! No, that wasn’t very scientific, but it sure got me wondering where else we buy something blindly because of loyalty instead of checking the price!

For comparison, assuming it has to be Tylenol for some specific reason, here are the Walmart and Rexall prices from the same day:

Walmart 200 pack at $0.09 per Rexall 200 pack at $.135 per

While not everyone has a Costco membership, their no-name at 1.6 cents per compared to Rexall at over 8 times as much is a reason to re-think your brand loyalty, to shop around, and to consider a Costco membership (because half of it would have been paid for with this one purchase).

Amazon Vs Walmart: Your Wallet Will Thank You

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One thing is certain: Most of us shop at Walmart or Amazon at least once a month or (a lot) more. One is pretty convenient to get to and one is just a few clicks away on your phone. Which one you drive to or click on is becoming more important to your wallet. Because, if you don’t comparison shop, it’s going to empty your wallet rather quickly.

From its inception, the goal of Amazon was to dominate the market with low prices. But that ended, or rather it transitioned, to convenience quite some time ago. With a reported 100 million plus people having Amazon Prime, there is an entire generation that values the convenience of two clicks to buy and guaranteed next day delivery. Amazon is banking on the fact that those prime customers don’t shop around much – and they’re right.

Convenience trumps price – just like the closest ATM with a four dollar “service” charge trumps free withdrawals at our own bank three blocks down the street. As we’ve talked about more than three years ago, Amazon isn’t the least expensive on identical products almost half the time (according to studies originally reported by US consumer guru Clark Howard.

Walmart also has some weird pricing on their website. Most of it appears to be from third-party vendors (which is also the vast majority of Amazon’s inventory. Here are some of my shopping attempts and price comparisons from the last two weeks:

Yesterday I bought the pretty plain Remington R3 razor at my local Walmart. I thought $40 was a little high, but bought it anyway…until I got home and checked Amazon! $118 total vs. $40 is insane!

The legal rip-offs for those not bargain shopping works the other way around, too. This is a simple 10 pack of plastic cover plates for light switches: $15 from Amazon vs. $64 from Walmart for a 12-pack!

A gray bus pan that restaurants use to clear tables: I needed two of them since they’re great for the garage. But I almost had a heart attack seeing the Walmart price of $200…for something I bought at Costo Business Centre for $6.

There were a few more of my purchases – or purchase attempts – from the last few weeks where either Amazon or Walmart weren’t even close. While these may be obvious, it’s the 20 smaller things you buy where the prices are “only” out 10 to 20 percent that don’t make it onto our “better double check that price” radar. And that’s what both of these giants, and their third-party vendors count on. At a time when it seems like everything is already up in price by at least 10-20 percent, take the two minutes to compare prices. Your wallet will thank you!

My (Almost) $60 Checkout Mistake

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How careful are you to watch the prices of items scanned at the checkout? Unfortunately, most people don’t look. It’s pretty easy to tell what others do: Just watch what they’re doing and where their eyes are looking when they, or a cashier, are scanning their purchases.

As a result, we just look at the displayed total and pull out or debit or credit card to pay. I normally keep an eye on the scanned items, especially those sold by weight. I’ve stopped a cashier when some fruit came out at (what I thought) was an insane price to delete it. But confession time: I clearly need to be doing it all the time!

At Costco a couple of days ago, I just needed some crackers, cookies and croissants. I ran all six items through the self-serve checkout, saw the $100.84 total and paid with my debit card thinking: Yup, can’t get out of Costco for under a hundred bucks.

Five seconds and two steps later I stopped. Wait a minute. A hundred bucks for THIS? That’s when I saw the sixty buck charge for a dozen croissants. Yes, they’re really good, but not sixty bucks good!

The bakery department person doing the labels that morning simply entered too many digits to print the scan sticker. Mistakes happen, it was fixed at customer service, but hopefully the lesson will stick. According to a report from the Journal of Retailing, about 4.08% of scans are incorrect. 2.33% are priced too low while 1.75% are too high.

The Retail Council of Canada also has voluntary rules for compensating customers. Sadly, it appears Costco either isn’t part of it or wouldn’t honour it.

Come to Edmonton For Some BIG Savings: Costco Business Centre

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The above clip is from Modern Family when Mitch first discovers Costco. Even if you think you know Costco, there’s another whole new level you’ve never experienced.

Pack the car and make a trip to Edmonton – but a big truck would be better than a car! In two weeks (opening April 6th), the fourth Canadian Business Store opens in Edmonton (10310-186 Street – about 10 blocks from West Edmonton Mall), and it’s nothing like a normal Costco store!

I’ve been in a number of them in the U.S. and they’re quite overwhelming and very different. No bakery department, jewelry, clothing and the likes to take up space. But you will find over 2,000 items not stocked in regular Costco stores – and in more bulkier bulk form – much of it on pallets right on the floor, instead of on shelves.

The reason you may need a truck is that the 211 litre drum of maple syrup ($2,500) probably won’t fit in the trunk of your car. If you can’t get your head around 211 litres, that’s one and a half full bathtubs. How about a 15 pound Toblerone (I love Toblerone, but I can’t be trusted with that much chocolate).

If you want to stock up on breakfast items for the next few years, I’d recommend the 25 pound jar of peanut butter ($64). Sure, it’ll take two people to lift it each morning, but think of the savings! And Tetley tea: A package of 1,100 tea bags for $28. That’s 2 ½ cents for your morning tea – and enough for the next three years. If you re-use a tea bag a second time (come on…be honest…) you’ll be good for six years. Let’s just hope your pantry for storage is as big as your trunk to get it all home! Edmonton may not be the City of Champions anymore, but now we’re certainly the City of Costco Business!

On the “Costco sad side,” they have now closed their in-store photo labs. It’s a casualty of digital and at-home printers. The reason it’s sad is that a simple 8×10 enlargement was $1.99. The best price I could find is now London Drugs at triple the price. Ouch! You can still order from Costco online – but with some pretty steep shipping rates.

And the “shame on you, Costco” is their new affiliation with an insurance company called Inova. They’re at inovainc.ca. I’ll post my experience with them in the next few weeks: A great online rate quote for my home insurance that turned out to be a totally legal scam, because the quote doubled when I called to place it.

The Rules of Purchase Returns Are Changing

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How much of a hassle should it be to return something you purchased? There’s a fine line between the few who massively abuse it, and those of us who need to return something that doesn’t fit, won’t work, turned out to be overpriced, or needs to be exchanged. And retailers are tightening up on all of us.

Over $400 billion of merchandise is returned for a refund in North America each year. That’s a ton of product! Retailers claim that costs them $400 billion in sales, but that’s just not true. Lots of the merchandise is put back on the shelves to sell again, and a part of it goes to the secondary market, to places such as Marshalls or Winners.

Habitual returners are about one percent of customers. But, because of them, all of us are going to pay the price through more hassle to return something. Retailers have been really generous with returns, thinking it’d have a big impact on increased sales. Costco and Sears with their incredibly generous return policies led the way that all retailers matched to some degree or another. That’s going to change to a new way of thinking that returns aren’t going to be a right, but a privilege. That’ll take a lot of re-educating and push-back.

The coming new way will be that you’ll earn the right to return something by how much business you give that store and whether you’re part of their loyalty program. So, they’ll have to track your purchase history, which means you’ll have to give up your privacy rights in order for them to do that.

If you’re old enough, you’ll remember a third-party called Telecheque. If you wanted to pay by cheque, they’d phone in your name and bank info and that company would authorize your payment. For returns, the company is called Retail Equation. Smaller stores or chains will track your purchases and it’ll be this third-party that will decide if you can return something or not.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

$10 Cell Plan,Free Cruise, Generic Drugs & Costco

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Unlimited $10 cell phone plans: Yes, but it’s the U.S. – a great reminder of how badly we get ripped off here in Canada. But if you go to the U.S. a number of times a year, or if you’re there for the winter, you should know this. Taking your Canadian phone means a U.S. roaming plan that’s around $5 a day or $30 a month. That’s a lot more expensive than getting yourself a U.S. phone and a U.S. plan. The $10 is at unrealmobile.com and is for one GB of high speed data plus unlimited calls and texts. Just check what the rate is for calls to Canada. It runs on the Sprint network so you just need an unlocked phone and a $5 SIM card from Sprint or also AT&T.

Plan B, which is what I have, is a $3 plan from Ting. That’s a flat per month. When you use it in any month, it triggers $3 for 100 texts, and $6 for unlimited calls. It’s just for my three or four U.S. trips, but I’m also going to switch to unreal now. (For a review, go to Clark Howard’s website at clark.com – he’s the best U.S. consumer help guru that loved the service when he recently tested it.

A free cruise, but only if you’re a smoker. Yes, sounds kind of strange, but this one time, a bad habit can be rewarded. In September and October each year, a number of cruise lines offer seasonal Maritimes to New England cruises. The one I was on last year started in Quebec City with three stops in the Maritimes, then Maine, and ending in Boston. Other cruise lines follow a similar itinerary. Here’s the free part: A carton of cigarettes is around $140 here. Duty free on the ship, it’s about $40 Canadian. Since there’s a few stops in Canada before heading for the U.S., buy a few cartons, then get off in Halifax or St. John’s, walk two blocks to the post office, and mail them to yourself. Once you’ve docked in the U.S., you’re restricted to bring back one carton into Canada. While you’re still inside the country, AND have access to duty free, you’ve got that window of opportunity. Six or seven cartons will save you the price of your cruise.

Generic prescriptions are massively cheaper than the brand name drugs. Don’t think of generic meaning “not as good.” Generic if the financial word for “less expensive.” I needed three prescriptions filled after some dental surgery yesterday and asked the Costco pharmacy to make it generic. If it’s from a doctor, just ask him or her to put “generic OK” on the prescription when possible. I paid $31 total instead of $74 for the brand names (Tylenol 3 being one of them that I can pronounce). For someone with no insurance, that mattered to me. And do go to Costco. What 99% of people don’t know is that the law says pharmacies have to serve you. The law in every province and state is that you can go to Costco without a membership to get your prescription filled. You won’t regret the savings. If they won’t let you in, just as the door person to get you a manager, and remind them of the pharmacy exemption.

George Boelcke – Money Tools & Rules book – yourmoneybook.com

Keeping You Updated

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Things change pretty quickly in the world of finance, credit, money and investing. Here are some updates to things we talked about in the last few  months. You can always find the stories at yourmoneybook.com and click on the radio stories button:

A few months ago we talked about the changes for airlines and your frequent flyer miles. Well, Air Canada just did another round of cutbacks to what you’ll earn and an increase to what you’ll need to redeem. Remember to think of your reward miles like bananas. Use them up as they don’t increase in value over time! Oh, and Westjet and Air Canada now charge baggage fees – surprise! Did you think they’d just ignore the $30 to $50 million in profits that you’re now going to hand over forever?

If it makes you feel any better, the deep discount carriers in Europe and the US now charge for carryon luggage. With Spirit Air, you can pre-buy it online at $35 for a carryon. If you want until you get to the airport, it goes up to $50 and if you do it at the gate, it’s $100 for a carryon!  Oh, and you’re paying $10 to print your boarding pass.

Yikes, it’s offical: Costco is dumping American Express in Canada. You’re Amex card is no longer welcome starting January 1st. They’re now partnering with Capital One. What’s in my wallet? Not Capital One! But, it’s a good guess that they changed over for a whole lot more money from Capital One…But why go from Amex whose clients spend four times more than Visa clients to a card that targets credit challenged people? Makes no sense, even if their kick-back is way higher.

I just read two reports that show independent book stores are growing in numbers and volume of sales. Great news as I love independents. I don’t deal with Chapters – you won’t find my books with them. I’m the author of 17 books. 14 are only on my web site and three are ONLY available at a few independents, including Mosaic on Bernard. When I talk about shopping local, I actually give up a ton of sales to do so. Actions speak louder than words.

For the last month, the stock markets have gone a little nuts. Down 300 points in a day, up 200 the next. We keep talking about the dangers of buying one or two stocks. If you’ve done that, if you gambled like that, you’re probably down a ton of money. If you’ve invested in good growth mutual funds, you’re already up again. I manage a seven figure account for a relative and all the bad news last month still had a 2% return for the month with Dundee Wealth.

And if you’re a gambler, gold and silver are below 2010 prices. Bitcoin, which is an online currency is down 75% for the year. If you bet only on energy stocks, you probably lost over 40% of your money. Those one-off buys are not investing. They’re gambling – and on these and many others, it’s a big loss right now. Investing is a five year or longer time period with a mix of good growth mutual funds with a long track record. Investing is also buying a fixed amount each month. Set it and forget it.

Four Ways to Keep Money in YOUR Pocket

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A large part of our weekly tips involves keeping money in your pocket. So, today, here are four ways to do just that:

Are you interested in getting something done for cheap? These days, what do you actually get for five bucks? Well, there is a very cool new website called fiverr.com. For five dollars, there are a huge number of people who will do anything from critique your resume, to setting up and posting a You Tube video for someone’s birthday, or will build a one-page web site for you. The list of what’s available is endless, and there is also a section for you to post what you want done for five dollars, that someone can choose to take on. Check it out.

Cell phone two or three-year contracts are a really bad financial trap, that’s something we’ve talked about before. In the last quarter, 75% of Americans who got a new cell, or had their contract come up, did NOT sign for another contract, but went to a monthly plan. THAT is exciting, and a wave that will come to Canada with the new players now in the market. With no contract, you are not stuck for three years.

That is exactly why the I-phone is not the biggest seller, not even the 2nd biggest seller, because the only way to get one is to be locked into a contract! Many Blackberry and Google phones don’t handcuff you. Bet Apple isn’t that happy, either.

The reason the big companies want to hook you into a three year contract is that they are afraid. They are afraid that you’ll find a better deal, better service, or just afraid to compete in the marketplace. When the carriers have you hooked, it no longer matters that they’re not the best, cheapest, or whatever the issue, because you’re not going anywhere! I don’t use a cell much and loaded $100 on my pre-paid cell. It lasts me a year – that’s $8 a month!

Wireless cards for laptops are a great convenience. It means you can literally get on the internet anywhere, anytime. They’re reasonably inexpensive – on the surface. But be careful and watch the traps: A caller on the Clark Howard show had a $62,000 data bill. What did he do? He downloaded the movie Wally, for 35 minutes while vacationing with his kids in Mexico. The cell phone company who sold him the plan reduced it to $17,000. Isn’t that a deal? A $17,000 bill so his kids could watch a movie download.

The internet access is charged by megabyte, not by minute, if you do not have an unlimited use plan. Even then, check that you are not paying roaming charges when you are out of your home area. You’ll have to ask, because it’s not something they’ll volunteer to tell you when purchasing the plan.

An equally expensive story was that of a U.S. visitor using his Blackberry internet for 16 minutes at the Toronto airport and getting a $5,000 bill! Be careful and ask first!

Two University professors recently did a study that showed we spend more at Costco than we intended. Gee, we needed a study for that? Yes, it’s hard to get out of Costco for under $100. The way I do it, is to NEVER take a cart. When my arms get full, I stop buying more stuff, or change my priorities. No wonder that the average Costco store does $134 million in volume a year! But the good news is that their mark-up is always 14%, and Costco, on things like televisions, doubles the warranty period from one to two years. I recently bought my LCD using my Amex card, which also doubles the warranty. So I may have just turned a one-year warranty into four years. I’m not sure if the double Costco warranty doubles again with my Amex – and I hope I don’t have to find out.