Membership Warehouse Stores: Deal or No Deal?

• Do the Math on Membership Fees: Many people are philosophically opposed to paying "for the privilege" to shop someplace, and when you put it that way, it is hard to swallow. But it's easy to do the math to figure out if and when you'd recoup your membership fees (generally about $30–$50 a year). You can go to most warehouse-store Web sites to compare prices on certain items to see how much you'd save. Warehouse stores sometimes offer free trial memberships or allow you to browse to get an idea of the potential savings. Here's a tip most people don't know: Warehouse clubs cannot require you to be a member in order to use their discounted prescription-drug services, since such drugs are regulated by the federal government.
  
  
• Too Many Perishables: Overstocking on perishable items can quickly eliminate any cost savings if they end up spoiling and in the trash can, so be extra careful. And food products aren't the only things that can go bad. Lots of things, from batteries to baby powder, have a limited shelf life that you need to be aware of when buying in bulk. Make sure to check expiration dates.
  
  
• Know Your Prices and Per-Unit Costs: In general, it's safe to say that warehouse clubs have very competitive prices on most products. You can still find some items for less at regular stores, but you have to be a smart shopper and spend time in order to do so. It's also worth noting that coupons are not always redeemable at all warehouse clubs. Warehouse prices are generally lower, because the package quantities are bigger (typically 20–200 percent larger than in other stores). So the most important price to compare is "per-unit cost" of all products. (Also look for "cost per ounce," "cost per 100 napkins," and similar signs posted on warehouse shelves.)
  
  
• Quality Counts: If you've never shopped at a warehouse store, you may be surprised to find that many items these merchants stock are of at least slightly better quality than similar items at regular stores. In the case of meat, produce, and other food products, you'll often find more of a restaurant-grade selection than in typical supermarkets. Other warehouse products—from power tools to cleaning products to tulip bulbs—may be the commercial-grade version of brands you see in average stores. Consider this increased quality when evaluating warehouse prices.
  
  
• Try Before You Buy: This is my wife's greatest warehouse weakness: She'll buy a jumbo-sized product at the warehouse store and then immediately discover that she doesn't care for it. Being the parasite in our marriage and hating to waste anything, I feel compelled to use up whatever she doesn't. In fact, I'm still nibbling away at a 40-pound barrel of cheese snacks she bought at a warehouse store during the Reagan Administration. To avoid such stale snacks and other wastes of money, try the small size of a product before you supersize it at a warehouse club.

Jeff Yeager is the author of the book, "The Ultimate Cheapskate's Road Map to True Riches." His Web site is www.UltimateCheapskate.com.