Money Management

Shoppers know that Kirkland Signature makes products that offer quality at the lowest prices. Read on to learn why! 

When you think about generic brands, you probably think of lower-quality products with bland packaging. But there is one brand that defies these stereotypes: Kirkland, which is developed and sold exclusively by Costco. The popular warehouse retailer launched Kirkland Signature products in 1995, first starting with 30 different products. Since then, it has expanded to 350 products and now accounts for about $60 billion of Costco’s $222.7 billion annual revenue, almost a quarter of its sales.

How successful is Kirkland? It’s larger than Hershey, Campbell’s, or Kellogg. In fact, Nestlé, Procter & Gamble, PepsiCo, and Unilever are the only consumer packaged goods (CPG) companies larger than Kirkland. In comparison, Walmart’s private label, Great Value, is valued at $27 billion, less than half that of Kirkland Signature. Kirkland brand products are known for high quality and affordable prices, helping you keep more cash in your savings account. Here’s why Kirkland is the king of generic brands and what makes its products so great.

Quality

The secret behind Kirkland’s success is quality. Costco uses a rigorous quality control process to ensure that Kirkland products meet or exceed the quality of name-brand products. This is because many of the top national brands are also the third-party manufacturers for Kirkland Signature products, the only difference being the lower price and the distinct black, red, and white label and packaging.

Costco’s secret comes down to its meticulous selection process. This includes carefully selecting name-brand products that are not only popular with customers, but can also be sold at a discount of at least 20%. Costco then first offers these suppliers the opportunity to create a Kirkland brand product alongside their own. This unique approach allows Costco to provide its customers with a diverse range of high-quality and affordable options while building strategic partnerships with its suppliers.

For example, Kirkland Signature’s coffee is made by Starbucks, batteries by Duracell, and diapers by Huggies. In a 2019 talk at Georgetown’s McDonough School of Business, Costco co-founder and CEO Jim Sinegal stated that one of Costco’s goals from the start was to make Kirkland Signature’s products “equal or better quality than national brands.” Kirkland customers can rest assured that they are getting products that are just as good, if not better, than the name-brand versions.

Affordability

While Kirkland products are of high quality, they are also very affordable — in fact, there are many amazing Costco buys for under $20. In addition to its high quality, one of the other criteria that Costco set for the Kirkland brand was to save customers at least 20% off of the national brand. “And that wasn’t what the national brand would sell for in a department store or supermarket, but what the national brand would sell for at Costco,” Sinegal clarifies, providing even more savings for shoppers.

Kirkland items are priced significantly lower than their name-brand counterparts, making them a great value. For example, Kirkland’s Extra Strength Acetaminophen Gelcaps are $0.05 per capsule. In comparison, the cost of a comparable Extra Strength Tylenol® Rapid Release is $0.12 per capsule, more than double the cost. Duracell is the manufacturer of Kirkland Signature Batteries, yet a 48-count package of Kirkland Signature AA Alkaline Batteries costs $0.40 per battery. The same Duracell’s AA batteries are sold on Costco’s website at $0.52 per battery. By choosing Kirkland products, customers can keep their credit card bill in check without sacrificing quality.

Variety

According to its recent annual report, Costco stated that its focus is on “the key priorities of offering new items, providing cost savings and improving quality.” New Kirkland items included women’s jeans, reformulated dog food, sauté pans, BBQ pellets, fresh mini cakes, and chicken yakisoba.

Kirkland products cover a wide range of categories, from food and household items to clothing and tech products. This variety allows customers to do all their shopping in one place and saves them time and money. It’s also worth noting that Kirkland products often come in larger quantities than name-brand items (as they are sold in bulk), which can be great for households with larger families or for stockpiling.

Brand loyalty

Per Costco’s 2022 annual report, the “Kirkland Signature brand realized strong global growth” in 2022. Kirkland has developed a loyal following among those who are aware of the quality and affordability of its products. Many of these customers are so loyal that they will only buy Kirkland products. In 2021, the private label market reached a record $199 billion, with Kirkland’s loyal buyers making up almost 30% of it.

Kirkland has become more than just a product line. It has become a magnet that draws in customers and ensures they renew their memberships year after year. Experts have noted that having one consistent name has helped set Costco apart and establish a strong brand identity. It has played a significant role in cementing Costco’s reputation as a store that offers value without compromising on quality.

Customer satisfaction

Finally, Kirkland’s commitment to customer satisfaction is a big reason for its success. If a Kirkland product does not meet the customer’s expectations, Costco will refund or replace the item, no questions asked. This policy gives customers the confidence to try new Kirkland products knowing they can always return them if they are not satisfied.

Costco has disrupted the generic brand market with Kirkland by creating high-quality, affordable products that are loved by its customers. In addition, it also offers exclusive promotions and allows customers to save even more and earn Costco cash rewards with the Costco Anywhere Visa® Card by Citi. Costco has clearly established a winning formula that has made Kirkland the king of generic brands.

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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.Citigroup is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Costco Wholesale, Starbucks, Visa, and Walmart. The Motley Fool recommends the following options: short April 2023 $100 calls on Starbucks. The Motley Fool has a disclosure policy.

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There are three types of credit cards I’ll always steer clear of, including cards with rotating rewards bonuses. Here’s why. 

I’m a big fan of credit cards. In fact, I have several rewards cards and I’ve used them to cover the cost of airline flights and to earn cash back that I can invest in my brokerage account to help me accomplish important financial goals.

Despite the fact I love credit cards and see them as a valuable tool, there are three kinds of cards I will never use. Here’s what they are.

1. Cards with rotating rewards bonuses

Many credit cards out there offer rotating rewards bonuses. These cards typically pay you 5% cash back on a specific category of spending, but only for one quarter. Then, the next quarter, they switch to paying 5% cash back on something else. For example, they might pay you 5% back on gas during one quarter and groceries during the next.

For me, there are two big problems with these cards. The biggest issue is that you typically must activate the “bonus” category in order for it to go into effect. And you have to do this every single quarter. If you don’t remember to activate the bonus category, then you’ll get stuck earning just 1% cash back, which is a really low rate.

The second problem is that you have to keep track of which category is giving you the bonus spending at any given time. And if you don’t want to get stuck with the paltry cash back on other kinds of spending, you’ll need to use a different card for non-bonus purchases.

I don’t want to deal with this much hassle. I would rather just use a card that makes it easy by offering me a more generous rate on all the spending I do without requiring me to take any extra steps to get it.

2. Store cards

Store credit cards are another kind of credit card I steer clear of. And there’s two reasons for that as well.

One issue is that these cards have higher interest rates. That’s not a huge concern for me since I never carry a balance. But, if I did happen to need to borrow for a month or two before paying off my balance in full, I wouldn’t want to take a chance of having to pay it at the very high rate store cards generally charge.

The bigger problem for me is that the rewards on store credit cards aren’t usually very good. Usually, you only get rewards you can use in the store that offers the card. And, in a lot of cases, you have to spend more to use the rewards or use them within a certain time. All of this means I could be forced to actually buy stuff I don’t want just to use the credit card rewards that store cards offer.

3. Cards that don’t offer rewards

Finally, the last type of credit cards I’ll steer clear of are those that don’t offer rewards at all. With so many great rewards cards out there, there’s absolutely no reason for me to choose a card that doesn’t give me cash back or points for spending — especially since I have good credit and can qualify for any card I want.

There are good reasons I steer clear of each of these three kinds of cards — and you may also want to avoid them as well, since you can find credit cards that don’t come with these downsides.

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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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Having too much insurance is possible, as paying for unnecessary coverage can result in wasted premiums. Learn more here. 

Buying enough insurance is crucial. Without the right coverage in place, a disaster could quickly drain a person’s bank account and leave them without the funds they need to rebuild or restore themselves to the position they were in before tragedy struck.

But, while everyone needs to make sure they have enough insurance — including car insurance, home insurance, and life insurance — it’s important not to go overboard either. Having too much insurance can be a bad financial choice.

The downsides of having too much insurance

Having too much insurance may seem like a good problem to have, but that’s not necessarily the case.

For one thing, an insurance company isn’t going to pay out more than a claim is worth. This could be an issue for things like home or auto insurance. A homeowner who has a policy with $300,000 of coverage for personal property but who only owns $100,000 of personal property is paying for added protection they aren’t really getting. If their property is destroyed, the insurer is going to want to see an inventory and receipts to estimate the value of their items and will only pay out what it would cost to replace property they actually had.

A second issue is that buying more insurance than needed comes at a big cost since premiums go up when the policy limits increase and when additional types of coverage are added. A driver who pays for roadside assistance coverage who already has AAA is really just wasting money on this unnecessary protection. They’re paying higher car insurance premiums for a kind of coverage that doesn’t offer them any actual value.

How to determine how much insurance is enough

Since it’s silly to pay higher premiums for unnecessary insurance coverage or insurance coverage that doesn’t even really provide added protection, it’s important to think about how much insurance coverage is actually needed.

First, consider the value of the property that is being insured. Whether it’s a car, house, or personal property, it’s possible to estimate how much it is worth. Make sure policy limits on an insurance policy don’t exceed the amount the insurer would pay based on the value of the property that is being insured.

Second, think about what is actually being purchased when buying insurance coverage. A policyholder purchasing protection does so in order to transfer the risk of loss to an insurer. It makes sense to transfer the risk of certain kinds of losses — like a totaled vehicle — to an insurer. But it doesn’t make sense to transfer the risk of very minor losses or to transfer risk when there would be no actual loss at all.

By taking the time to consider these issues, insurance buyers can avoid getting either more coverage than they need or higher policy limits than they would really require. They can pay premiums only for protection that is valuable to them and can make sure they are protected from serious risks while avoiding enriching an insurance company for no reason.

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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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Costco has a very generous return policy. Read on to learn more. 

Shopping at Costco will often result in a smaller credit card tab than shopping at a regular supermarket. And on top of that savings, if you pay for an executive membership, you can snag 2% cash back on all Costco purchases.

But savings aside, another perk of shopping at Costco is getting to benefit from the retailer’s extremely generous return policy. In fact, you may be surprised at how flexible Costco is when it comes to accepting returns.

You can easily return items due to quality issues

Costco will take back any item that clearly doesn’t work the way it’s supposed to or suffers from a clear quality issue. For example, if you buy pants at Costco and notice a rip or stain, you can bring the item back, even if you’ve already taken the tags off. If you buy an electronic toy that doesn’t work (say, it’s supposed to make sounds but doesn’t), you can return it.

You can also return food items to Costco when they’re spoiled ahead of their printed expiration date. This holds true for perishable items and non-perishables alike.

You can return opened, partially eaten food

You might assume that if there’s a quality issue with a food item you’ve bought, you can take it back to Costco for a refund as long as it’s unopened. But Costco will actually accept opened items that are partially consumed if there are quality issues.

The general rule is that to get a refund, you need to be returning 50% of the item. So if you bought a two-pack of melons, cut into one, and found it bland, you can generally, in that situation, get a refund even with one of the melons being partially eaten.

You can even return a food product to Costco on the basis of not liking its taste. But you’ll need to be reasonable when doing this. That means you can’t buy a box of 24 Costco bakery cookies, eat 20 of them, and then return the box with the remaining four, all the while claiming they just didn’t taste good.

There are key Costco rules you’ll need to follow

Although Costco strives to be flexible with returns, some items come with specific rules. Electronics, for example, must be returned within 90 days. And if you’re returning a diamond over 1.00ct, you must also present all original paperwork associated with that purchase. From there, you’ll have to wait for a Costco gemologist to inspect your return for authenticity before you’re issued a full, unrestricted Costco credit or refund.

You should also know that you generally cannot return cigarettes or alcohol purchased at Costco. And certain products, like batteries and tires, may come with a specific limited warranty only.

You also cannot get a refund for custom-ordered Costco products unless there’s a clear quality issue, such as if the item fails to meet specifications. And you can’t return tickets you buy through Costco to a live performance event.

But for the most part, you can return many, many things to Costco without a problem. And that’s yet another reason to do your shopping 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.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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