One of the selling points of a Costco membership is that members can fill up their tanks for less at Costco. People shell out their $55 membership fee believing they’ll make up the fee simply by buying gas at Costco. The good news for people not interested in a Costco membership is they can take advantage of Costco gasoline prices without even being a member. Over the weekend I discovered something I’ve coined, “The Costco Effect.”
My gas gauge was hovering just above ‘E,’ and I was looking to fill up. I checked prices on my way to the gym and noticed that the closer I got to the gym, the lower the advertised gas prices. I developed a theory as I passed the Costco a few blocks from my gym. The theory was this: Gas stations nearby a Costco will have lower gas prices in an attempt to compete with them.
Over the next week, I started watching gas prices at gas stations around my local area, including those around the Costco. As we’re all used to, gas prices went up and down in unison (or at least within a few hours). But I also noticed that the prices at the gas stations within a few blocks of the Costco remained consistent with their difference between Costco and other stations as well.
Here’s an example of data I took during one day:
- Station near my home: $1.99 per gallon
- Station within blocks of Costco: $1.89 per gallon, later raising to $1.94 per gallon
- Station about ½ mile from Costco: $1.94 per gallon
- Costco: $1.89 per Gallon
The Costco Effect, or in other words the phenomenon that gas stations nearby a Costco will have lower gas prices even compared to stations of the same type that are further away, appears to be real.
Gas stations near Costco were 5 to 10 cents cheaper per gallon than stations further away.
This seemed like a great money saving technique for people that don’t have a Costco membership. But let’s not stop there. Most major gas retailers have some form of rewards program, or offer coupons. For example, I signed up for money saving text messages from the brand of gas station located ½ mile from Costco and get text messages almost weekly for 7 cents off per gallon of gas. Combining that with the price advertised due to The Costco Effect ($1.94 per gallon), I filled up at a price of $1.87 per gallon. That’s 2 cents cheaper than Costco, and 12 cents cheaper per gallon than filling up at the station near my home.
So how much does this combining of discounts save me?
I have a van with a 20 gallon tank, and a car with a 14 gallon tank. I fill them each once per week, for a total of 34 gallons of gas x 12 cents per gallon for a total savings of $4.08.
The amount of money saved is admittedly not earth shattering but it’s so easy to take advantage of, as it takes almost zero effort assuming the consumer drives right by the gas station anyway. Getting the most out of your hard earned cash is a lifestyle. It’s not about just saving $4 a week on gasoline. It’s about saving $4 a week on gasoline, a few bucks on groceries, a few more on not eating out, some more on insurance, etc, etc. When you add it all up we start talking about real money that can be put towards some other meaningful use.
Have you ever noticed The Costco Effect? Do you take advantage of it?
