10 Sneaky Ways Costco Gets You To Spend More Money
When you want to track down some good deals, Costco is probably your destination of choice. Who wouldn’t want to shop somewhere with good prices, all the while munching on a few free samples? While yes, Costco does have impressive deals, but they also have some pretty impressive methods to make you part with your hard-earned dollars. Here are 10 Sneaky Ways Costco Gets You To Spend More Money.
10. It’s All About The Layout
Have you ever ran into the grocery store for what was supposed to be only a couple of things and ended up leaving with way more stuff than you planned? Yea, that’s not an uncommon occurrence, and it’s mostly due to just how the store has laid things out. While it’s true for almost every grocery store, it’s especially true at Costco. Everything at Costco is strategically placed, and you have no choice but to walk by all the money-grabbing booby traps. The store layout is made to encourage impulse buying – kind of like how other stores have candy bars and magazines near the check-out line. But, at Costco, they take things even further. They put all of the costly things in the center of the store, making it impossible to avoid the inevitable. According to a survey done in 2018, the average American spends around $5,400 per year on impulse buys. Costco knows this very well and takes advantage of it. This is why you might sometimes find items next to each other that don’t at all seem like they belong together. i.e., socks next to trail mix bags. This floor plan concept is called the “racetrack” design, made for customers to walk past as many products as possible, leading them to impulse buys. And soon enough, your tiny list of toilet paper, soda, and bread turns into a hundred-dollar bill and a quick run to the food court.
9. A Real Treasure Hunt
Speaking of a strategic layout designed to make you spend more money, Costco is all about making you look, search, and look again, until you finally find what you need – while your cart keeps filling up in the process. While the aisles continue the same pattern of having the “most expensive items” in the middle, that doesn’t stop those items from moving. Sometimes Costco likes to play hide-and-seek with the customers. If you’re a regular at Costco, you probably know way too well the feeling of grabbing a bottle of detergent one week and then on your next visit realizing that it’s been moved to another location. Don’t worry; it’s not your memory failing you; it’s just Costco playing its mind games. They purposely move products around the store to different locations, hoping that you will look for them. It creates a kind of ‘treasure hunt’ experience in which you need to walk around to find what you need. Plus, most of the aisles don’t even have signs! How are you supposed to find that jumbo jar of peanut butter that gets moved every week? They also constantly rotate a certain percentage of their inventory, replacing products to create a sense of urgency and uncertainty. An “if you don’t buy it now, it might not be there again tomorrow” kind of thing. Sure, it helps you discover new products that you might not have thought of buying, but it also makes your bill go up and their pockets fuller.
8. The Foodcourt Is A Must
Everybody knows that a trip to Costco is not complete without stopping by the foodcourt to get one of those delicious, giant hotdogs. Well, at least, that’s what Costco wants you to think. With a combo being so cheap – a price that hasn’t changed since 1985 – it’s pretty hard to resist. Costco is known for its hot dogs, cheesy pizza, and big ice cream cones. They also know darn well just how much customers love these treats, which is why you will usually see the food court placed right up at the front of the store or right before checkout. It’s a strategy to catch your attention and either lure you into the store or push you to buy “one last thing” before heading home. Since more people are drawn to the food court, it inevitably means that more people will shop. And in turn, it also keeps people in the store longer than they may have planned, potentially leading them to spend more money. And, even if you had already planned to visit the food court after your grocery run, just think about this: you’re sitting there, you’ve already checked out, devouring your juicy hot dog, looking at people passing by. How many things do you think you’re going to see in other people’s carts that you simply must have but forgot to buy? The answer is: probably enough to make you go back in for a second round of shopping!
7. Fancy Vs Warehouse
When going shopping, whether it’s for groceries or for fun, it’s all about how you feel when you walk into the store. If you are stressed or out of your comfort zone, you’ll most likely get what you need and get out. But if you feel relaxed and comfortable, hello shopping spree! Sometimes you’ll walk into a store, and it just looks so painfully fancy and over-the-top expensive, your wallet will cry a little. At Costco, you probably have a completely different experience. With cement floors, fluorescent lighting hanging from exposed beams, and products stacked on pallets, fancy is not exactly the word you would use to describe a Costco experience. That’s because the store wants to emphasize a “warehouse vibe” meant to convey lower prices. By not trying to look expensive or fancy, it makes the customers feel the same way about the merchandise, making them buy more and more. Costco’s co-founder Jim Sinegal once joked that “it costs a lot of money to make these places look cheap,” but they do spend a lot of time and energy in trying to create that image. Basically, if customers feel at ease and not pressured by the expensive decor, the more likely they are to fill their carts, feeling like they’re getting great deals.
6. Free Samples Aren’t Actually Free
Just like the food court is a rite of passage at Costco, so is the array of free samples available at the end of almost every aisle. You could practically get a full meal just by eating the samples. So imagine doing your grocery shopping on an empty stomach – that’s playing a very dangerous game. Let’s just say that piece of cheese you just sampled might end up in your cart against your will if your stomach is calling the shots. Apparently, giving free food to people and giving them a taste can really boost sales – who would’ve thought! For example, when they offer free beer at national retailers, according to The Atlantic, it results in increased beer sales by as much as 71 percent. And free pizza samples? That’s even crazier. This tactic increases pizza sales by 600 percent. It would be safe to say people have a soft spot for pizza, especially when it’s free. But, those free samples don’t necessarily come without a cost. Costco guilt trips many of its customers into buying the product they just tried. When someone hands you a delicious piece of piping hot pizza, you might feel a surprising urge to reciprocate and do something for them – aka buy the whole thing. Free samples not only increase sales and your guilt but also make for more loyal customers who will most likely come back to try other free goodies.
5. Return Policy: Generous Or Mind Control?
One of Costco’s best features, other than all of the samples and cheap deals, is its super lenient and generous return policy. You can essentially return anything you’re not satisfied with – literally anything. Those croissants you just bought at the bakery weren’t soft and fluffy enough? Just bring them back! Whether it’s broken, half-eaten, it doesn’t matter – everything can be brought back to the store – even a 10-year-old refrigerator that stopped working. However, this “risk-free 100 percent satisfaction guarantee” return policy doesn’t just come from the kindness of their hearts or to show customers how much they care. It turns out; it’s only another smart marketing tool – a way to make you spend more. By offering such an open and transparent return policy, it removes the self-doubt of thinking you might be stuck with something you don’t like. If you don’t like something after a month, you just have to bring it back, no biggie. And while it sounds awfully big-hearted, it simply encourages impulsive buying – especially during limited-time sales. Psychologists and marketing experts have also found that the more lenient a store’s return policy, the less likely the customer is to return purchases. Either it’s out of laziness or change of heart, but 91 percent of consumers say that a store’s return policy is an important factor in their buying decision. So smart move, Costco, smart move.
4. Weird Price Codes
At Costco, it’s all about confusing customers into buying more. Okay, not exactly, but on some level, it looks like that’s what they’re trying to do. Have you ever noticed all of the random symbols on those big Costco price tags? Do you have any idea what they mean? Probably not. However, that gibberish could end up helping you save a lot of money – or the complete opposite. For instance, an asterisk on a price tag means Costco will not be restocking that item, meaning you need to stock up on it now! Another trick? Pricing stuff at 99 cents versus a dollar. Yes, it’s the oldest trick in the book but your brain will focus more on the item priced at $2.99 rather than $3. To the untrained eye, it might seem like random pricing without any impact, but in reality, it’s so much more than that. Because of the left-digit effect, our brains see $9.99 as a much better deal than $10, even though, ultimately, they’re the same price. Prices ending with .49, .79, or .89 mean that Costco got a deal with the supplier and it’s being passed on to the consumer. But those ending in 99 cents have no discount whatsoever. The moral of the story; learn your price codes symbols and be ready next time you go to Costco.
3. The Membership
Being a part of something is always special, and feeling like you belong and matter to a company is even better. That’s exactly what Costco capitalizes on. By paying a membership fee, you can’t help but feel a little like a VIP. Not only does that get you in the door, but it also keeps you coming back. After all, how wasteful would it be to pay for a membership if you’re not going to show up to use it, right? Basically, if you pay the money for a membership, you’re going to want to get your money’s worth and keep going back to the store. People have to justify the money they already spent on the card. It also comes from the fact that, even if you don’t use your Costco membership card on a regular basis, the store still collects a lot of money from you. In 2015, Costco customers paid over $2 billion dollars in membership fees alone. So if you paid for that membership card, you might as well use it as much as you can. And even though people sometimes hesitate to buy a membership at first, about 90 percent of customers renew their membership every year. But if you don’t plan on going very often, maybe think twice about applying for a card and just tag along with a friend for now.
2. Some Bulk Is Bull
It’s no secret that when at Costco, their slogan is buy big. Actually, when you go to Costco, you can’t do anything but buy everything big! Everything is designed to save you as much money as possible while getting the best bang for your buck. And even though the majority of the deals at Costco are really good, for some products, you could probably find better ones elsewhere. Buying in bulk is a big part of the Costco experience, from jumbo packs of toilet paper to enormous jars of mayonnaise, but a little research beforehand might help you save some money on items that are simply not worth buying in gigantic quantities. For example, buying produce in bulk – a big no-no. Unless, of course, you’re a big family or you’re buying for an office lunch, but otherwise, steer clear. No one can eat that many fruits or vegetables before they go bad. You’ll just end up wasting money – and food. Basically, anything fresh and with a close expiration date should be avoided if not for very special occasions. Instead, pick up things that will last you for a longer time, like frozen meat, oil, or even spices.
1. The Choice Is Not Yours
Obviously, Costco knows how to successfully strike good deals on all kinds of products. In this giant warehouse, you can find pretty much anything you’re looking for, from food to electronics and even eye exams. While there’s a huge variety of products, there isn’t that much variety when it comes to more specific products. In other words, you will find big bottles of ketchup, but you probably won’t find as many brands as you would in a regular grocery store. They keep maybe 2-3 different options of the same type of product instead of stocking up on a bunch. And, of course, Costco will most likely put its own brand before everything else. Another psychological tactic to trick you into spending more money, at its finest. It’s really brilliant when you think about it. Studies have shown that if you offer people 20 different types of jam, you’re not going to sell as many as if you offer them only 5, So, by offering items in bulk with only one or two varieties, Costco increases its chance of making the sale. Even if you don’t need a gallon of mayonnaise, if that’s all that’s available, that’s what you’ll buy anyway. You might think you have the upper hand when shopping in this big warehouse, but in reality, you really don’t.
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