Costco vs. Sam's Club vs. BJ's: Which membership gets you the most bang for your buck?

By Zoe Han

Determining the best wholesale club for a given shopper isn't just about membership costs and perks, but also convenience, experts tell MarketWatch

Access to Costco's $1.50 hot dogs and $1.99 pizza slices now costs members $5 more per year, and the price increase is leading some shoppers to take a closer look at the discount retailer's competitors.

As of Sept. 1, Costco's annual membership costs $65 for a basic plan, up from $60, and $130 for its Executive Plan, up from $120. The increase was the company's first in seven years.

See also: Costco's price increase just went into effect. Here's how much its membership fee has gone up since the 1980s

Even before the price hike, Costco's (COST) membership was slightly pricier than those of its wholesale-club competitors. BJ's (BJ) basic Club Card membership is $55 a year, while its Club+ Card will run you $110 a year.

Walmart-owned (WMT) Sam's Club charges $50 a year for a Club membership, and $110 a year for a Plus membership. However, for first-time members, Sam's Club is currently offering a promotional discount: Until Sept. 27, a Club membership is on sale for $15 for the first year, or $50 for a Plus membership for the first year.

Hot dogs, pizzas and even gold bars aside, here's how a Costco membership compares with offerings from its two competitors.

How are Costco, Sam's Club and BJ's different?

The three warehouse clubs differ in shopping experience. Most of Costco's items are its Kirkland Signature private-label products, whereas Sam's Club has more national brands, while BJ's has a mix of both and offers smaller packaging sizes that are more suitable for smaller households, noted Phil Lempert, the founder and editor of SupermarketGuru.com, a site following the food and retail industry.

From a price perspective, a grocery haul of the same or similar items from Sam's Club was the cheapest among BJ's, Costco and Sam's Club locations on Long Island, N.Y. - likely due to parent company Walmart's buying power, according to a 2023 analysis by AARP.

Depending on a shopper's needs, there could be one warehouse that suits them best regardless of the membership terms, according to Lempert.

If shoppers "just care about price and if they are near a Sam's Club, that's the way to go," he said. "If you want as close to a supermarket shopping experience as possible, that's BJ's. And if you want to buy meat for a barbecue, that's Costco."

What does a basic membership get you at Costco, Sam's Club or BJ's?

At all three wholesale clubs, a basic personal membership allows you to shop in person and online and access low prices not available to nonmembers. Wholesale clubs use membership-fee revenues to offset costs, allowing them to offer lower prices than the average supermarket.

BJ's says on its website that its prices are up to 25% lower than typical grocery prices. The membership also offers low prices at BJ's Gas; one gallon of regular gasoline cost $2.95 as of Sept. 6 at the retailer's East Rutherford, N.J., location, compared with AAA's national average of $3.29 per gallon the same day. A Sam's Club basic membership offers savings on fuel, and free curbside pickup for eligible orders that are $50 and up. Costco also offers savings on groceries as well as on gas; for example, at a Clifton, N.J., location, the regular gas price was $2.89 per gallon on Tuesday.

While Costco only allows members to eat at its food court, Sam's Club says its cafe - as well as its pharmacy and optical center - are open to the public.

All three memberships also offer pathways to travel discounts and have members-only travel platforms for booking trips and hotels. Andrea Woroch, a money-saving expert, said she prefers Costco Travel to the competitors' offerings because her family was able to secure better deals through Costco Travel on car rentals, hotel fares and admission to various theme parks. Finding the best fit requires a bit of comparison shopping and figuring out one's travel needs, she added.

What does a pricier membership at Costco, Sam's Club or BJ's give you?

While the pricier memberships offered by all three retailers promise an additional 2% reward - in the form of 2% cash back on the total order - the maximum amount a member can earn varies depending on the wholesale club. Each club also has different rules for whether rewards can be redeemed in person or electronically.

Costco's Executive membership caps rewards at an annual maximum of $1,250. Both BJ's and Sam's Club cap their 2% cash-back rewards at $500 a year. At Costco, paying an additional $65 for an Executive card also promises discounts on Costco Services, which include services such as home and auto insurance, car purchases and home-improvement supplies.

Aside from that, BJ's Club Plus membership gives members rewards that never expire, and an opportunity to earn twice or three times as many rewards during special events. While Sam's Club cash rewards never expire as long as the shopper has an active membership, Costco's cash-back rewards expire Dec. 31 and any unused rewards don't carry over.

For Sam's Club, the additional $60 in membership fees means free delivery and shipping on eligible items, half-price tire installation, a $60 Sam's Club eGift card if a shopper adds an additional T-Mobile (TMUS) phone line, savings on glasses and other eye-care products, and some drug prescriptions for free.

A Sam's Club spokesperson told MarketWatch that Plus members within 15 miles of a local Sam's Club receive free same-day home delivery for orders of $50 or more.

Costco and BJ's did not respond to MarketWatch's request for comment.

Can you share a Costco, Sam's Club or BJ's membership with others?

Last year, Costco started cracking down on freeloaders. The store had allowed nonmembers using someone else's card to enter its stores during the height of the pandemic, but not anymore. Costco says on its website that each cardholder can bring up to two guests per visit, but the guests cannot buy items.

Just like the other two wholesale clubs, Costco allows a membership to be used by two people as long as they live at the same address.

Any additional memberships at Sam's Club - with no requirement for the new cardholder's address - are discounted to $45 for both membership tiers. At BJ's, discounted memberships are only available for Plus members, who can get up to three supplemental memberships for $30 a year.

When choosing a wholesale club, consider convenience and location

Determining the best wholesale club for a given shopper isn't just about membership costs and perks, but also convenience, shopping experts told MarketWatch.

For starters, location is important: While Costco and Sam's Club have many locations across the U.S., BJ's is more East Coast-centric.

Choosing the chain that's most convenient to the shopper allows them to use the membership more often rather than letting it go to waste, said Trae Bodge, a shopping expert and brand strategist. A nearby location also allows the member to save on daily needs other than groceries, such as gas and prescriptions, Woroch noted.

A shopper's preferred payment method also makes a difference, Woroch said, especially if they are an American Express (AXP) or MasterCard (MA) cardholder. Costco accepts all Visa (V) cards, but no other credit cards. It could also make sense for frequent shoppers to sign up for a store credit card, which could give them extra cash back, she added - but they need to compare different cards ahead of time and know their own spending habits.

If you're not sure which wholesale club is the best fit, try one out and cancel the membership if you're not satisfied, Lempert said. BJ's, Sam's Club and Costco all guarantee members can cancel their membership and get a refund at any point if they are not happy with it. Though warehouse shopping may sound attractive for the savings, it's not for everyone, Lempert noted.

"You go into these warehouse clubs and the prices are good and the quantities are big. It becomes overwhelming and it becomes like a game ... [to] just see how much money you can save," he said. In turn, people often overbuy in warehouse clubs, he added - defeating the purpose of trying to save money with a membership.

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-Zoe Han

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09-11-24 1146ET

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