June 18, 2003

The Privileged Have Their Memberships

Most people in the US are familiar with "BJ's Wholesale Club" or similar stores. These are places that charge you a yearly membership fee to shop within their warehouse-like store. Additionally, they often offer tire or other automotive services and gasoline.

It seems to me to be a pretty good idea (read, a pretty good trick). Let's look at the subtle manipulation going on at these places:

  • They get their customers thinking that the deals are so good that they have to pay money for the privilege of shopping.
  • Since customers have already paid for the membership,they feel they'd better use it, else they'd feel like a fool for having ponied up.
  • Some of these clubs don't even let you in the door unless you can flash them a membership card. This discourages you from comparison shopping if you're considering a membership based on the price merits.
  • Once you are in the habit of simply going to the club, you're less likely to price-compare with other stores.
  • To get your savings, you're often forced to buy in large quantities which encourages increased consumption rather than conservation. So, while there may be a percentage cost savings you may find that overall you are spending and consuming more which is neither good for your bottom line nor waistline.
  • You may well buy stuff you don't need, or in quantities you don't need, which will go to waste. Of course, this is assuming you find a good price or are simply convinced you are finding a good price.
  • Catering to the urge to consume, free samples of fatty foods are liberally offered at high-traffic times. The lure of even one bite of free food is so strong that you will see grown men tripping over each other to get to the sample stand.
This raises the question, are the prices really any better? In the past, I had done some quick comparison shopping on things like window cleaners, razors, hand cream, and various foods. My preliminary findings were that you could often get a better price at a discount store, or a regular store if you were willing to wait for a sale, using a tool like SalesHound.

How did I do the comparison? BJs began sending me free 2-3 month memberships every other year starting about 8 years ago, around October. So, I would join, shop for the holiday season (that was their intention) and let my membership lapse. But in 2001 I signed up for a membership because I found that we were drinking so much milk that I could recoup the price of membership by buying all of our milk at BJs. Also, their gas prices would reduce my payback to about 4 months if I used them exclusively for my then vehicle, which was a gas guzzler.

But I let my membership lapse. My current car is efficient and we don't drink quite so much milk anymore. I considered calling up BJs and asking them to reduce or (dare I ask?) waive my membership dues so that they could continue to have the privilege of my patronage. (Yeah, I'm a cocky son-of-a-gun at times) But I never did it, figuring that it would fall on deaf ears.

Lo and behold, Margaret found this in the mail the other day:
Congratulations!
You've just been selected for a FREE
1-Year Membership to BJ's Wholesale Club.

There's no catch to this offer. Only a small number of people across the country have been chosen to receive free memberships. You're one of the lucky few who can take advantage of BJ's incredible Members-only savings -- without paying a membership fee! [...]

I'll put this membership to good use. For the good of my loyal readers. I'll choose a few items from BJ's and then see if I can get a better deal elsewhere. I'll be using items I'd be likely to purchase, but if someone wants to suggest an item or too, I may add to the list.

Posted by James at June 18, 2003 9:37 AM
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Comments

I'll bet wholesale clubs were big during the whole Y2K fiasco. Just think how much of a deal one could have gotten on 60 gallons of bleach! Say, what _did_ people use all that bleach for anyway? Is this akin to the whole "bread and milk" thing New Englanders have when a snowstorm is predicted? Again, what happens to all that bread and milk? Wouldn't it be better to stock up on chicken wings and beer?

Posted by: Patti M. at June 18, 2003 10:22 AM

They sell bleach in 2 1/2 gallon jugs there. I think you have to buy 2 at a time.

That's enough to make quite a bit of chlorine gas. Where's the Department of Homeland Security when you need them?

-JP

Posted by: JP at June 18, 2003 11:40 AM

Er, "when you need *it*."

Posted by: JP at June 18, 2003 11:40 AM

I believe Sam's (as in Sam Walton, as in Wal-Mart) is planning on buying BJ's. Not sure if that was an unfriendly takeover, or if it was by invitation, but offering free memberships would be a good way to fatten up the company for a new purchaser.

Posted by: Julie at June 18, 2003 1:15 PM

Very interesting.

'Course, it seems to me that it would probably be a good long-term atrategy to drop the membership dues altogether.

Then again, plenty of people appear to be paying them.

Posted by: JP at June 18, 2003 1:56 PM

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