The only good thing about getting gas at Costco is that the price is usually 20 cents less per gallon than the market price. But the cons outweigh the pros.
Pros versus Cons
One of the worst things about Costco gas stations is the long lines. Since most of them are self-service, this can cause customers to have to wait longer. Costco gas stations also have big lines to get gas. People say they have had to wait anywhere from 30 minutes to an hour. If you need gas quickly, Costco is not the place to go.
To get gas from Costco, you have to be a member, which costs extra. The problem with this is that each card only comes with two plastic memberships. If more than two employees need to fuel, they must share these two plastic memberships. It’s important to know that you can add more people to a Costco business account for an extra fee per card, but there is a higher membership cost for the business account.
Location is also important. Some people don’t live close enough to a Costco warehouse to make the time it would take to drive to a Costco gas station and wait in line worth it. Mentioning location, Diesel is only sold in a small number of Costco stations nationwide, so availability is extremely limited. Another drawback is that cash is not accepted at Costco stations. Since only Visa cards are accepted, you have to use a Visa card, no exceptions.
Why Costco is Not a Good Choice Overall
All of these cons are much more important than the pro. Even though the price is great, Costco is not a good choice for other reasons. As a business owner, if you send one of your drivers to Costco to get gas and it takes him an hour, then you have to pay for that one hour. Over time, those costs add up, and the business loses money because of it. For companies with bigger trucks, drivers have to be careful around the smaller cars because of the tight spaces.
Even though Costco has lower gas costs, the accompanying problems make it less than ideal, especially for businesses. Long wait times, having to be a member, limited number of stations. The fact that only Visa cards can be used to pay, not having diesel in all locations, and not having enough room for bigger cars all make it less convenient and efficient. Even though the price of fuel with a fuel card is sometimes a little higher, it is usually a better choice. The slightly higher cost is made up for by how easy it is to use, the wide availability of stations, and how easy it is to track and control fuel usage. If you look at more than just the price per gallon, businesses will get more value and efficiency from a fuel card with more options than Costco gas.
Example of Analyzing the True Costs
If a driver makes $20 per hour, a 30-minute wait costs $10 in pay. If a driver needs to fill up 20 gallons of gas, at $4.50 per gallon, Costco will cost you $90. When the cost of the driver’s time is added in, the total cost goes up to $100. Looking at the total cost per gallon, including the waiting time, the true cost of the gallon is $5.00. There is a relation to this proportion. The more gasoline you buy, the less it costs per gallon when the waiting time fee is considered. Even though Costco has lower gas prices, the total cost decreases as more gas is pumped when accounting for wait time.
Considering that a driver has to wait 5 minutes in line at station in a fuel card network to fill up 20 gallons of gas and that they make $20 an hour, the cost of their time is about $1.67. At $4.50 per gallon, the 20 gallons of gas from the fuel card station will cost you $90. The total reaches $91.67, which brings the true cost of a gallon of gasoline to $4.58.
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