By Rebecca Xu
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Money-sensitive people all over the world have discovered the wonders of Costco Wholesale. Buying in bulk to save more seems like a heavenly premise; you save money and you can use a product forever before replenishing. Despite its money-saving deals, Costco may actually contribute to more spending.
Almost every week, my mother makes a trip to Costco, the wholesale superstore we have all come to know and love. And every week, she comes back with mountains of products—toilet paper, Tropicana, bottled water and various snacks to name a few. This tradition has been in place for years. It’s all for the glorious cause of saving money.
As I stare at our supersized shampoo bottles and package of three dozen eggs, I have begun to wonder about the true effectiveness of Costco. The idea behind Costco is that for an annual fee, members will have access to reduced unit prices in the store, emphasis on the “unit.” Since practically everything comes in bulk, the price per pound or per individual package is lower than the same product in a typical grocery store.
For example, Cinnamon Toast Crunch comes in packages of two oversized boxes sure to last a family a few months. Aveeno lotion is sold in packages of two 18-ounce bottles, sometimes with a sample tube of something else thrown in. A box of Welch’s fruit snacks comes with 80 little bags.
Yes, these products are cheaper if you divide the total cost by the amount, but I question if they’re worth the time and effort to simply consume them. Our family got one of the super packages of Aveeno a few months ago and I’m still pumping out lotion by the handful.
Ironically, Costco advocates saving money yet consumers are attracted to bulk “deals” and end up spending more for products they don’t need.
Wired contributing editor Jonah Lehrer attributes this behavior to sensors in the brain that deal with happiness and pain.
Lehrer said, “In fact, researchers have found that even when a store puts a promotional sticker next to the price tag—something like ‘Bargain Buy!’ or ‘Hot Deal!’—but doesn’t actually reduce the price, sales of the item will still dramatically increase. These retail tactics lull our brain into buying more things, since our normal response to price tags is pacified.”
A blogger on the website thecouponproject.com further explains that consumers are submitted to the “Costco Marketing Machine.”
Each store is organized so that as a person proceeds through the store, he sees the displays of plasma TVs, computers, fine jewelry and other costly items before he reaches the actual food aisles.
Here in the store, the prices seem to be nothing compared to a $2,000 television or $6,000 diamond ring, thus encouraging the consumer to buy more.
As a result of these measures, people consume much more than usual, partially to make their superfluous purchases worth the money. After all, those giant Costco muffins aren’t going to eat themselves before they start to become stale.
In a sort of mindless delusion, buyers return to the store and start the process all over again once they run out of something. Sometimes they will stock up even if they have plenty of something. For example, the cabinet under our sink probably has four gigantic Pantene bottles. My mom says she always forgets if we have shampoo or not, so she every once in a while when there’s a sale she’ll buy another one or two bottles.
That’s not to say Costco doesn’t have its perks. It is noticeably less expensive in singular items such as electronics, appliances, books and gasoline.
Because they do buy and sell in bulk, prices in everything from swimsuits to iPods are lower than their counterparts in other stores. Also, I don’t know anyone who doesn’t love the delicious free samples and free coffee. When it comes to the priced stuff, however, consumers get caught in the paradox of buying more to save more. Next time we visit Costco, I’ll gently remind my mom to lay off the 8-pack of toothpaste.