Money Monday: Cut Your Membership Fee Before it Cuts Into Your Budget

With escalating consumer retail prices and tight budgets being stretched, it’s time to look at where cuts or adjustments can be made. One line item in your budget I’m targeting for cuts this week is your retail memberships, such as Amazon Prime. You can stop reading now unless you are willing to confess to your Amazon Prime addiction. Do you need Amazon Prime Membership? Honestly! Isn’t this Prime membership thing the cause or significant contributing factor to your shopping binge, budget failures, and overspending habits? Here are some reasons to consider cutting some of your retain membership costs.

Membership Fees

Before joining some retail group and signing up for your next membership consider if it’s worth it? What retailers sell is the opportunity to pay less for future purchases, but have you done the math? I would argue in some cases that membership fees cause you to overspend. You will likely overspend because you want to acquire the reward points, so you purchase items you don’t need. Along with buying what you don’t need is the idea that you might fail to perform comparative shopping because you want the rewards. After all, why not take advantage of your membership and all the perks offered! What goes along with that is also the idea of consumer loyalty to the organization.

Finally, have you considered how the retailer will use your information and how easy is it to get out of the membership program? Are you conformable giving your date of birth and phone number to a retailer who may share your data with other third parties? Sure getting a membership is easy, and the discounts seem significant, but can you quickly get out since membership renewals are automatic? Here is a great option! Barnes and Noble will allow you to opt-out of autorenewal and will provide a refund within 30 days of your membership renewal if your membership has not been used! Can you get out, and what are your options? Read the fine print!

Membership Strategy

Let’s examine your wallet or purse and see how many membership cards you possess. Based on your usage, do you need that many cards? Here is the thing: You initially got that membership because they offered free shipping or delivery. But isn’t that true of so many membership card services now? My point is there may be overlap in membership services from several of your vendors, so why retain all of those cards? For example, Walmart and Target have same-day service drive-up or pick-up options without going into the store to shop. Further, not everything you need is deliverable anyway, even through Amazon.

Finally, when you examine your shopping pattern, is there a particular shopping day or season that you take advantage of discounts and remain relatively inactive most of the year? If that’s your story, perhaps you don’t need a membership, but you only need engagement once every twelve months and take advantage of the 30-days FREE trial period. You may join for one month free and even pay for another month during the holiday shopping season to take advantage of the deal and then quit. You might consider joining with a friend and splitting the cost if that works within the rules and helps manage your budget.

WHAT’S UP!

Today’s what’s up is about membership and other fees. If you don’t know by now, you should be aware that membership fees from Amazon increased this year. But what you need to know is that COSTCO membership fees are set to increase later this year.

Further, Visa and Mastercard and set to increase what is known as “swipe fees” for the usage of your debit or credit cards. These fees already exist but are set to be increased and further impact the cost of your purchases at the store. Swipe fees average 2.22% per transaction, according to a Neilson Report. If you feel the need to join some of these retailers’ membership programs, you might want to consider it before prices increase. And that’s what’s up!

Ruthven R. Phillip, Esq., is a tax attorney, Stewardship and Philanthropy Ministry Assistant, and CEO of Give2Getrich, LLC. Give2Get Rich, LLC 2022. All Rights Reserved. Any distribution or reproduction of part or all of the contents in any form is prohibited.

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