Many Americans apply for Costco memberships in order to shop at Costco’s chain stores. Costco’s products are abundant and reasonably priced, helping consumers save on expenses throughout the year. Costco is also known for selling some great value items, such as a $1.50 hot dog combo and a $4.99 rotisserie chicken. Gift cards are also available at Costco, but despite being praised for their value, these gift cards also have several drawbacks.
According to a new study by Bankrate in July 2023, due to concerns about inflation and economic downturn, 39% of American adults stated that they have been more inclined to use gift cards since 2022. This is especially true for young people: 50% of Generation Z (ages 18-26) and 49% of Millennials (ages 27-42) said they have used gift cards more in the past year, while the figures for Generation X (ages 43-58) and Baby Boomers (ages 59-77) were 35% and 27%, respectively.
However, the study also revealed that nearly half (47%) of American adults have at least one unused gift card, voucher, or store credit. Nearly two-thirds (62%) of high-income households stated that they have at least one unused gift card.
While most grocery and retail store gift cards offer the same value as the card amount, meaning a $100 gift card can purchase items worth $100, Costco gift cards offer more value.
The gift cards sold at Costco are essentially discount vouchers, including discounted gift cards for various retail brands, restaurants, and even airlines. The discounted price for a $100 gift card is usually $79.99. Generally, Costco gift cards can save 10% to 30% of the face value.
However, there are also several drawbacks to purchasing gift cards at Costco.
Consumers can purchase gift cards at Costco to enjoy truly great discounts, such as up to a 25% discount on face value. But before purchasing, one needs to ensure that these gift cards can be fully used because there is no turning back: Costco does not allow gift card returns.
The variety of gift cards sold at Costco is not as diverse and colorful as other stores, with limited options. Generally, in a Costco store, you are likely to find gift cards for local restaurants or chain retailers.
Of course, Costco occasionally offers unbelievably great gift card deals, such as Southwest Airlines gift cards.
Almost all of Costco’s online gift cards are sent electronically to the customer’s email address. Physical gift cards can also be purchased in-store.
Furthermore, many of the best gift cards have limits on the number of each member can purchase. For example, you can only purchase two $100 Instacart gift cards.
Some other gift cards also limit the number of transactions that can be completed.
For example, with E-Uber gift cards, each member can only purchase two $50 gift cards for $79.99, which is a great value. However, the total transaction can only be done once. You can buy two E-Uber gift cards in one go, but if you only buy one today, you won’t be able to buy another one later.
Costco does not allow customers to choose the face value of gift cards; they only sell gift cards with set denominations.
For instance, you can buy five $15 Subway gift cards, but you cannot buy three $25 Subway gift cards or one $75 Subway gift card because there are no $25 and $75 denominations available.
(This article referenced a report from the financial website, The Motley Fool)