Many Americans apply for Costco memberships in order to shop at the Costco chain stores. Costco’s products are diverse and affordable, helping consumers save money throughout the year. Costco is also known for selling some great value items, such as $1.50 hot dog combo and $4.99 rotisserie chicken. Gift cards are also available at Costco, however, despite being praised for their value, these gift cards also have a few drawbacks.
According to a new study by Bankrate in July 2023, due to concerns about inflation and economic recession, 39% of American adults indicated that they have been more inclined to use gift cards since 2022. This is especially true for young people: 50% of Gen Z (18-26 years old) and 49% of Millennials (27-42 years old) stated that they have used gift cards more in the past year, compared to 35% for Gen X (43-58 years old) and 27% for Baby Boomers (59-77 years old).
However, the study also revealed that nearly half (47%) of American adults have at least one unused gift card, certificate, or store credit. Nearly two-thirds (62%) of high-income households stated that they have at least one unused gift card.
Most grocery stores and retail outlets provide gift cards that hold the same value as the amount on the card, meaning a $100 gift card can buy items worth $100. But Costco gift cards offer even greater value.
The gift cards sold at Costco are essentially discount vouchers, including discounts on a variety of retail brands, restaurants, and even airlines. A $100 gift card typically has a discounted price of $79.99. In general, Costco gift cards can result in savings of 10% to 30% off the card’s face value.
However, there are also some drawbacks to purchasing gift cards at Costco.
Consumers can purchase gift cards at Costco for truly incredible discounts, such as up to 25% off face value. But before buying, it is important to ensure that these gift cards can be fully utilized as there is no turning back: Costco does not allow returns on gift cards.
The variety of gift cards available at Costco is not as diverse as in other stores, with limited choices. Typically, at Costco stores, you may only find gift cards for local restaurants or chain retailers.
Of course, Costco occasionally offers incredibly unbelievable gift card deals, such as Southwest Airlines gift cards.
Almost all of Costco’s online gift cards are sent electronically to customers’ email addresses. Physical gift cards can also be purchased in-store.
Furthermore, many of the best gift cards will limit the quantity that each member can purchase. For example, you may only be able to purchase two $100 Instacart gift cards.
Some gift cards may also limit the number of transactions that can be made.
Take the E-Uber gift card, for instance, each member can only purchase two $50 face value gift cards, for just $79.99, a great value.
However, the total number of transactions can only occur once. You can purchase two E-Uber gift cards in one go, but if you only buy one today, you won’t be able to purchase another later.
Costco does not allow customers to choose the face value of the gift card, they only sell gift cards with preset denominations.
For instance, you can buy five $15 Subway gift cards, but you cannot purchase three $25 Subway gift cards, nor can you buy a $75 Subway gift card as there are no cards with $25 and $75 denominations available.
(This article referenced a report from the financial website The Motley Fool)