Why Costco Doesn’t Accept Coupons

It is common practice for supermarkets to send out weekly newsletters with coupons attached. If you’re lucky, you’ll be given the option to load digital coupons onto your store card, so you may never have to clip a physical coupon. Either way, remembering those coupons is a great way to save money on groceries.

But Costco works differently. If you are a member, you may have noticed that Costco does not issue coupons on the items it sells. We also do not accept manufacturer coupons on the items we carry. But there is a reason for that.

Completely different business model

The reason Costco does not accept or issue coupons is because Costco’s business model is different from existing retailers. Costco charges an annual fee to its members. Currently, that fee is $60 per year for a basic membership and $120 per year for an Executive membership, which comes with 2% cash back on purchases.

Because Costco generates a lot of its revenue from membership fees, it can use that revenue to offset inventory procurement costs. Costco also negotiates with its suppliers to provide good deals to its members.

This allows large warehouse clubs to offer consistently low prices for the products they carry. Costco is so confident in the prices it offers that it doesn’t feel the need to accept coupons that might lower the price further because customers are already getting so much.

Plus, Costco offers discounts on inventory on a rolling basis. Sales information is usually provided to customers in the form of monthly mailings.

You can get your favorite laundry detergent for $3.50 off the regular price one month, and get $4 off your favorite cereal the next month. However, if you become a Costco member, you can receive these discounts. No need to clip or present a coupon to enjoy the discount.

Practices Costco members shouldn’t complain about

As a Costco member (or prospective member), it may be annoying to know that the chain doesn’t accept coupons. However, according to Costco, manufacturers often include the cost of coupons in the original price of the products they sell. Costco says, “We do not allow sellers or buyers to conduct such practices at Costco because they ultimately provide no benefit to our members.”

In other words, a particular manufacturer may issue a coupon offering $5 off a specific item, which most retailers will accept. But what the manufacturer can do is make the original price of the item $35 instead of $30. In that case, it might be. It seems to be ~ It’s like coupons save you money even when they don’t.

Costco, on the other hand, may only charge you $25 for the same item. So while you may not be able to use a $5 off coupon, you’ll still be ahead financially at the end of the day.

One of the really great things about Costco is that their pricing and business model are very transparent. Costco doesn’t hide the fact that it doesn’t accept coupons, and boldly explains why it doesn’t need to. And as a member, that’s a practice you should appreciate.

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