Warehouse clubs like Costco are designed to help save consumers money.
Buying in bulk can lower your cost per item, and the retailer is known for competitive prices on everything from groceries to electronics.
Plus, the nice thing about buying Costco products is that the company stands behind every item it sells.
Not only is Costco’s Kirkland brand known for its high quality, but Costco’s generous and flexible return policy means that when you load up on bulk items and they don’t meet your expectations, you can ask for a refund.
But finance expert Dave Ramsey warns that one shopping habit at Costco could quietly drain your finances instead of improving them.
Ramsey warns impulse spending can add up
Dave Ramsey knows that making unplanned purchases while shopping is common. He actually calls it a “really normal” thing.
But Ramsey also warns that Americans spend an average of $150 per month on impulse buys. In the course of a year, that’s $1,800. And in the course of a lifetime, it could amount to an astounding $108,000.
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As Ramsey points out, impulse buys happen for a lot of reasons.
Sometimes, we rely on retail therapy to get through a rough day. Other times, we make unplanned purchases because we can’t pass up a great deal.
The problem is that a lot of people today can’t afford extra spending. Only 41% of Americans have the savings to cover an emergency $1,000 expense, reports Bankrate.
And in 2025, almost 25% of all U.S. households lived paycheck to paycheck, according to Bank of America.
Meanwhile, the average U.S. consumer has $6,595 in credit card debt, according to Capital One.
Impulse spending makes it harder to build savings and break the paycheck-to-paycheck cycle. It can also make a credit card debt problem exponentially worse.
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Why Costco encourages impulse shopping
The reason Costco lends to impulse shopping is simple — the company is constantly changing its inventory and introducing exciting new products to entice members to spend more.
If you’ve ever noticed that Costco doesn’t do a good job of labeling its aisles, there’s a reason for that.
Costco wants members to wander around looking for the items on their shopping lists. In the course of doing so, they’re likely to spot more items that tempt them, leading to larger per-visit transactions.
During Costco’s most recent quarter, the company reported that the average transaction was up 7.3% worldwide. That speaks to the appeal of Costco’s inventory coupled with low prices.
But while Costco’s treasure hunt-style shopping experience might make store visits more fun and engaging, they could hurt consumers individually.
“You’ve heard the phrase, people come in to spend $100 and walk out with $300… when they come in there and do their basic shopping, they pick up a few additional items that just compel them at the time,” CEO Ron Vachris said during Costco’s third-quarter 2024 earnings call.
That habit is great for Costco’s bottom line. But Ramsey warns that it’s detrimental to consumers.
To that end, he has some tips for shopping at a store like Costco:
- Make a budget and stick to it.
- Make room for a couple of planned fun purchases instead of going overboard.
- Shop with cash to limit extra spending.
Shopping at Costco can ultimately lead to big savings. The key, says Ramsey, is for members to not accidentally sabotage themselves in the process.
Maurie Backman owns shares of Costco.
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