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Although the rate of inflation has slowed down nationally, prices in my area still remain frustratingly high. Rewards credit cards have helped my budget, but some expenses just refuse to be toned down.
One way to combat stubbornly high prices is to buy gift cards at Sam's Club or Costco. Many of these gift cards have higher values than their price ($100 of value for a price of $70, for example), offering you instant savings.
In the past, I've been loyal to Costco's gift cards. But I've come to realize that Sam's Club deserves attention, too. Whether you're a member of both warehouses, or trying to decide between the two, here's why you might want to buy gift cards at Sam's Club.
1. Sam's Club has more variety -- by a lot
On its website, Costco sells gift cards to roughly 76 different retailers in my area. These retailers include many fan favorites, like Moe's Southwest Grill, Panera Bread, Southwest Airlines, Domino's, and Uber. It also has gift cards to local stores whose availability will depend on your ZIP code.
Meanwhile, Sam's Club sells over 400 gift cards online. Some of its selection overlaps with Costco -- it also sells gift cards to Southwest Airlines and Domino's -- plus others that Costco doesn't sell, like Starbucks, H&M, and PetSmart.
What I like about Sam's Club is that it sells gift cards to stores that could be considered essential spending. For example, if you count clothes as essential spending, you can buy gift cards to Old Navy, GAP, and Banana Republic, among other clothing retailers. Meanwhile, Costco's gift cards are usually -- though not always -- for discretionary purchases, with no clothing stores in its mix.
Side note: Cash back credit cards on Sam's Club purchases can add to the gift card savings. Check out our curated list of best cash back credit cards to see if you're missing out on extra savings.
2. Sam's club's gift cards have smaller values
Costco gift cards offer more value upfront. Typically, you can save about $10 to $30 per gift card package. But those savings can come at a high price: Most will cost you at least $70, with no option to buy smaller gift card denominations.
Sam's Club won't save you as much money on gift cards as Costco will. However, you can buy smaller denominations at Sam's Club. For example, you can buy different Domino's gift card packages at Sam's Club: $45 value (price: $42.98), $75 value (price: $65), and $100 value (price: $75). Meanwhile, Costco only sells one option: $100 value for $74.99.
To be sure, the smaller the denomination, the smaller the value. In the example above, paying $75 for a $100 gift card means you're saving $25 (or getting 25% of value). Paying $42.98 for a $45 gift card means you're saving $2.02 (or getting about 4.5% of value). On the other hand, if you plan to spend, say, $50 at Domino's, a higher denomination might be unnecessary.
3. Physical gift cards can be sent to you
If you're buying Costco's gift cards online, you're usually purchasing an electronic gift card. Though you can buy physical gift cards at Costco warehouses, Costco will rarely send you a physical gift card in the mail.
To be sure, many of Sam's Club's online gift cards are also electronically delivered. But several can also be mailed to you as a physical card. For example, the Wendy's $60 gift card (a multipack of four $15 gift cards) can be sent to your mailing address, as can the Starbucks $40 gift card bundle (a multipack of four $10).
Why does this matter? Well, if you're giving these cards as gifts to multiple people, then you'll have a physical card to give. For example, if you want a gift for your kid's teachers, you could dish them out from the multipack. Aesthetically, this might look nicer than stuffing a greeting card with a printed-out barcode, although, to be fair, the value doesn't change with the method.
Sam's Club makes it easier to pay
Sam's Club accepts all major credit cards . Unlike Costco, which only accepts Visa cards, this can open the door to maxing out cash back. Although Sam's Club has its own credit card, it doesn't earn cash back on gift cards.
To be sure, Costco's gift cards offer more value, even if the selection is limited and the denominations high. But if it doesn't sell gift cards to places of interest, Sam's Club might have more choices to your liking.
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