Money Management

Sam’s Club has a policy to check your receipt before you leave the store. Here’s why this policy exists and what the exit greeters look for. 

Sam’s Club warehouses have a huge selection of products, so shoppers often spend a lot of time there. Fortunately, the Sam’s Club app offers a convenient Scan & Go option for those who want to get in and out more quickly. But whether you get your shopping done quickly or take it slow, you’ll need to go through a receipt check as you exit the store.

While most shoppers don’t mind, some find these receipt checks inconvenient. And many wonder why Sam’s Club does this. There are a few reasons that every visit to Sam’s Club ends with a quick review of your receipt.

Here’s why Sam’s Club checks your receipt

When you exit Sam’s Club, the standard procedure is for an exit greeter to check your receipt and randomly scan three of your items. Here’s why it has this policy:

To ensure that you were charged correctly for everythingTo deter shopliftingTo have one more customer interaction

Sam’s Club isn’t the only store to have this type of policy. Costco is also known for checking receipts before customers leave, and some Walmart stores do the same. Now, let’s take a closer look at the reasoning behind Sam’s Club’s receipt checks.

To ensure that you were charged correctly

The official reason for receipt checks in Sam’s Club’s terms and conditions is to ensure that you’re charged correctly for your merchandise. Sam’s Club clearly wants to make sure you weren’t undercharged. Sometimes items get missed during the scanning process, like merchandise at the bottom of the cart.

Sam’s Club also wants to check that you weren’t overcharged. For example, an item may have gotten rung up twice by mistake. If so, a receipt check could catch that and get the correct amount charged to your credit card. For customer satisfaction, it’s better to catch this sooner than later or not at all.

To deter shoplifting

Retailers usually don’t mention this as one of the reasons they check receipts, but it is an effective way to deter shoplifting. Most shoplifters want to keep interactions with employees to a minimum, especially as they leave the store. Having exit greeters checking receipts can make thieves think twice.

To have one more customer interaction

Last but not least, a receipt check can be a good form of marketing for Sam’s Club. It provides the possibility of a positive interaction on the customer’s way out. The exit greeter can make sure the customer found everything they were looking for and mention upcoming sales for opportunities to save money.

Can you skip the receipt check at Sam’s Club?

You can’t skip the receipt check at Sam’s Club. It’s one of the terms that you must agree to as part of a membership. Here’s what it says specifically under Sam’s Club’s general membership policies:

“Receipts: To ensure that you are charged correctly for the merchandise you have selected, Sam’s Club may inspect or electronically scan your merchandise and electronic/phone or paper copy receipt(s) when you exit any Sam’s Club location.”

If you don’t let an exit greeter check your receipt, Sam’s Club could cancel your membership. Just like showing your membership card at the door, providing your receipt before you leave is something you need to do per the terms and conditions.

A receipt check may not be anyone’s favorite part of the Sam’s Club experience, but it normally doesn’t take too long. Considering the warehouse giant’s low prices, a receipt check is a small price to pay to shop there.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Lyle Daly has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.

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Not every home buyer needs a mortgage. Find out what happens when you purchase a home without one. 

Most people who want to buy a home can’t afford to do so outright. Because of that, they finance their home purchases by taking out a mortgage loan.

But you’re not required to take out a mortgage to buy a home if you don’t need one. Perhaps you’re buying a home in an inexpensive market and have the cash to cover your purchase in full. Or maybe you received an inheritance and are able to use it to buy a home outright.

When you buy a home without a mortgage, you simply hand over a check to your seller for your home’s purchase price. Purchasing a home without a mortgage has certain benefits, so if the option is available to you, you may want to consider it.

The upside of buying a home without a mortgage

When you purchase a home in cash instead of taking out a mortgage, you can reap savings in different ways. First, by not borrowing money, you don’t sign up to pay interest on a home loan. Given that today’s mortgage rates are pretty expensive, not taking out a mortgage could work to your financial advantage.

The average mortgage rate as of this writing is 6.71% for a 30-year loan, according to Freddie Mac. Meanwhile, let’s say you’re buying a $300,000 home. If you pay cash, it’ll cost $300,000. If you put down 20% and finance the remaining $240,000 at 6.71%, you’ll end up paying about $318,000 in interest alone. That’s more than the cost of the home itself.

Also, when you take out a mortgage, you’re charged closing costs to finalize your loan. Those can amount to 2% to 5% of the sum you’re borrowing in many cases, which is yet another added expense.

In fact, recent research from The Ascent shows that the average U.S. home buyer pays $6,905 in closing costs. That’s money you’d probably rather not shell out if you can avoid it.

What’s more, by purchasing a home without a mortgage, you can give yourself an advantage over other buyers when several of you are competing for the same home. There’s always the chance that a mortgage will fall through, leaving a seller in the lurch. If you come in as a cash buyer, the seller takes on less risk. So a seller may be more apt to work with you if you’re not relying on a mortgage to purchase their home.

Finally, it takes time to finalize a mortgage, which can make it so the closing process takes a good 30 to 60 days or more from when you enter into a home purchase contract. When you buy a home in cash, you don’t have to wait for a loan to be finalized. That means you can commonly close on your home more quickly.

Should you buy a home without a mortgage?

Buying a home without a mortgage does mean tying up a lot of cash in a home. That means you won’t be able to do other things with that money, like invest it, have it on hand for emergencies, or use it to renovate.

But if you can afford to buy a home without a mortgage, it might not only save you money, but also make the process faster and easier. And in the case of competing offers, it might spell the difference between a seller choosing you versus your dream home going to someone else.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Fractional shares are a convenient way to invest. Read on to see how they work. 

You’ll often hear that building a diversified portfolio in your brokerage account is a good way to make money. And it’s also important to diversify your holdings to protect yourself from losses during stock market downturns.

It used to be the case that diversifying a portfolio on a budget wasn’t so easy. After all, the less money you had, the harder it was to branch out into new investments.

But these days, a new brokerage account feature makes it easier to diversify your portfolio. Most brokerages today allow investors to buy fractional shares, which could make it possible to put your money into a larger number of individual companies. Here’s what fractional investing entails.

When you only own a fraction of a piece of the pie

It used to be that if you wanted to invest in a given company, you had to buy shares in full increments. These days, you can buy a fraction of a share of stock instead. And that might allow you to branch out nicely in your portfolio. It might also give you access to companies whose shares might otherwise be out of reach.

Let’s imagine you want to invest in Chipotle both because you like its menu and you think it’s a strong company with solid financials. Although the mega chain is known for its affordable food, its share price is anything but.

As of this writing, Chipotle is trading for about $2,040 per share. Of course, stock prices can fluctuate daily. But either way, it’s pretty fair to call Chipotle stock high-priced.

Thanks to fractional shares, though, you can invest in Chipotle even if you only have $20, $40, or $80 to work with. You’d simply own a portion of a share of that stock instead of a whole share.

Now, your goal in buying stocks is to see their value rise so you can make money. With fractional shares, you benefit proportionally as share prices rise.

So if you buy 1/4 of a share of a company that’s trading for $100, and its share price rises to $120 over time, your $25 share would grow to be worth $30. Of course, if the opposite happens, and that company’s share price drops, you’d take a proportionate loss. So if that same company’s share price were to drop to $80, your $25 share would only be worth $20.

You should also know that if you own fractional shares that pay dividends, you’re entitled to those paydays. But again, you’ll get a proportionate payout. So if a given company pays a quarterly dividend of $40 per share, and you own 1/4 of a share, you’d be in line for $10.

An option worth pursuing

Most major brokerages these days allow investors to buy shares of stock — as well as ETFs — on a fractional basis. If yours doesn’t, then you may want to switch to a brokerage that gives you that flexibility.

Fractional shares could be your ticket to diversifying your holdings and meeting your investing goals. And given how common the option is, there’s really no reason to deny yourself that opportunity.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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Some fliers use travel hacks to save money on airfare. But one popular practice called skiplagging could result in costly consequences. Find out more. 

Airline tickets are expensive. Because of this, many travelers use popular internet hacks to trim their spending. One popular air travel hack called skiplagging is often discussed online as a way to get a better deal on a flight. However, this hack could get you in trouble. Here’s why you may want to reconsider using this strategy when booking airfare.

What is skiplagging?

Skiplagging is when you book an inexpensive flight with a stopover with no intention of flying the entire itinerary. Instead of completing your journey and getting off the plane at the intended final destination, you get off the plane at the stopover.

This practice is sometimes called “hidden city” or “throwaway” ticketing. Some travelers find they can save money by doing this instead of booking a more costly flight with their chosen destination as the final stop. There’s even a company called Skiplagged that helps travelers find the best hidden city deals.

With the high cost of airfare, it’s easy to see why travelers use this hack to save money on flights. But while this practice may sound like a good idea because of the potential savings, your actions could have consequences.

Be aware of the potential consequences of skiplagging

Before considering this strategy in hopes to stick to your vacation budget, knowing the potential consequences is essential. Airlines aren’t big fans of this hack because they lose money.

Some airlines prohibit this practice and say so in their conditions of carriage terms. American Airlines is one such airline. The brand states in its conditions of carriage that “purchasing a ticket without intending to fly all flights to gain lower fares (hidden city ticketing)” is prohibited.

Fodor’s notes that it’s possible to be banned by an airline if it catches you skiplagging. While you might not get banned the first time, you may eventually get banned if you use this practice often. Being banned from a major airline could make traveling more difficult.

There can also be consequences if you do this when booking a round-trip ticket. Some airlines will cancel your return leg if they learn that you didn’t complete the original itinerary. For this reason, many travelers only use this strategy when booking one-way journeys.

Finally, another issue to consider is baggage. If you struggle to pack light, skiplagging won’t work for you. If you check a bag, it will reach the intended final destination, but you won’t be there to get your stuff. Many fliers who book hidden city flights travel with a carry-on bag.

One flier was billed $2,500 for repeat skiplagging activity

In 2020, one traveler shared their experience and a warning to other fliers on the FlyerTalk forum. American Airlines caught on to them using this practice. The airline found 52 instances where the elite status flier didn’t complete the intended itineraries.

American Airlines told the traveler they would need to provide compensation to bring their account to good standing, or their AAdvantage membership would be terminated. They would lose any program benefits and any miles in their account if they didn’t comply.

The company asked the traveler to pay around $2,500 to resolve the issue and keep their account. It’s likely this unexpected bill impacted their personal finances. I don’t know about you, but I don’t think this travel hack is worth a potential $2,500 bill.

Not all travel hacks are worth it

Skiplagging could save you money on airfare costs, but you may have to deal with unintended consequences. Not all travel hacks are worth it. If you want to save money on airfare costs, there are other ways to get a deal. Check out these suggestions to score cheap plane tickets. When making travel reservations, consider using travel credit cards so you earn rewards on your spending. You can redeem your rewards for free travel in the future.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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