I was at my local BJ’s Warehouse the other day and I noticed that they were promoting a way to get 5% cash back. For those who don’t live in the New England area, BJ’s is like Costco. It’s your typical warehouse club.
Since the prices are already very low, getting an extra 5% is intriguing. I don’t think Sam’s Club (see hours) or Costco (see hours) offers a similar discount… usually they top out at 2-3%.
Getting 5% back is usually a no-brainer. However, to get the BJ’s discount you have to be Elite member which costs more than the basic membership. It isn’t so easy to know if you it worth getting the Elite membership. Here’s some of the math I went through to decide if it was worth it for me.
The standard membership is $50, but the Elite membership is $100. That means that I’ll have to make $50 back to make it worth my while. to upgrade. At the 2% at some warehouse clubs that means spending $2500 a year or nearly $210 a month. However, at 5% you only need to spend $1000 a year, or around $83 a month.
I can fairly confidently say that we don’t spend $210 a month, because we do most of our shopping at the military base. However, at $83 a month, it is worth a further look.
The question then became, “How much do I spend at BJ’s?” It’s probably as simple as going to the service desk and having them pull up my account, but the line was a mile long and I was in a rush.
I got the idea that I could look my receipt and it might tell me. Unfortunately, it only gave me clues. It told me that I saved $204.60 this year by being a BJ’s member. It doesn’t break down where those come from, but I know some comes from my use of coupons, the rest comes from whatever BJ’s determines is a “savings”, which I couldn’t figure out.
Because my purchase this visit seemed fairly typically, I decided to use it to estimate my annual spending. My spending on this trip was $43.40 and I saved $17.72. Thus my savings were 40.8% of my my spending. I’m on pace to save $223.20 (calculation: ($204/11)*12)) this year. If my savings are typical my annual spending would be $223.20/0.408 or $546.66.
That spending doesn’t get me to either the $83 or the $210 mark to make it worthwhile to sign up for the 5% and get the rewards.
I was all set to admit defeat, but in writing this post I found I got some details wrong: check it out.
The BJ’s Perks Elite that gives you 5% rewards gives you a bonus $50 the first time you make a non-BJ’s purchase. That negates the extra cost of the Elite membership the first year. The 5% rewards are essentially a free bonus. So much for getting all “mathy” above right?
Ahh, but what about the following years? The renewal price for BJ’s Perks Elite membership is $75 instead of the $100. In year 2 and subsequent years, I’d be paying $25. Guess how much I need to spend per year for that $25 to make sense. If you said $500, you certainly have your math on.
Thus with my current spending, it looks like it might be a wash. However, in a couple of years, BJ’s might have have my dream television.
I suspect that I’m in the minority with how little I spend at warehouse clubs. I think most BJ’s members could save some good money every year with the BJ Perks Elite membership.
Thomas @ i need money ASAP! says
That seems like a good deal if you’re a regular customer. I can’t remember exactly what Costco’s premium membership is but I know it didn’t work out for my family. We don’t do enough shopping there. But $83/month seems totally doable.
I’m glad I’m not the only one who calculates membership clubs this carefully. It seems like if you do save, it won’t be much, so at that point I would focus more on how convenient or inconvenient it is for you to go to BJs compared to going on base.
Lazy Man says
I tend to go both fairly often anyway, so it’s more of matter of planning the most efficient trip to each.
I may have missed it, but the Elite membership requires the BJ’s co-branded credit card–a deal-killer for me. It’s only 2% back, like Costco, for the $100 membership.
Lazy Man says
Yep, it does. Why is that a deal killer for you? Just trying to limit your credit cards?