Costco now has delivery options to compete with Amazon — but customers are discovering a huge catch

March 21, 2018 at 12:15 PM EDT

Costco now has more options than ever to shop online with quick delivery.
However, these services come with an extra cost, with items costing up to 20% more than the cost of buying the same item in store.
It's clear Costco's new online services are not meant to replacing going into its stores.

It's now easier to shop online at Costco than ever.

Last year, Costco drastically expanded its online services, expanding its Instacart same-day delivery partnership and launching 2-day CostcoGrocery shipping.

There are catches for these services, however. Ordering from Instacart comes with all its usual fees ($10 per order or free delivery for orders over $35 for $145 a year), but if customer's use Costco's own same-day shipping site, ordering from Instacart is free.

CostcoGrocery shipping is free for purchases over $75, but each item comes with an extra shipping charge before that threshold. Instacart is available in most metro areas, whereas CostcoGrocery can deliver nationwide, but is focused on non-perishables.

That's not all customers can expect, however. Many customers have noticed how the prices on Costco's offering vary from in-store to online, and even from online service to online service.

Instacart admits as such on its website under the pricing policy: "Prices are higher than your local warehouse" it reads, warning shoppers not to expect the same deals Costco is known for.

Costco's own site even has higher prices than its stores. Items listed on Costco's website make this disclaimer, but don't say exactly what the discrepancy is: "May be Available at your local Costco Warehouse for a lower price. Item subject to availability," the disclaimer reads.

In a report comparing Costco prices online and in-store, the San Francisco Chronicle found that prices were consistently higher across nearly everything.

For example, a two-pack of Kirkland Signature Organic Creamy Peanut Butter was $9.99 in store, but online it was $11.99 — an increase of 20%. That kind of price discrepancy spread throughout the store, with most items costing 15-30% more online, according to the

Others, like frugal living bloggers, have found similar price discrepancies.

This could all be part of Costco's new online strategy.

Costco's online sales have been growing by leaps and bounds lately, growing 28.5% in the company's second quarter.

"There's a lot of low-hanging fruit there, because there's a lot of things we haven't done in the past," Costco CFO Richard Galanti said in an earnings call.

Costco is going after the convenience-minded customer here, which doesn't have time to do "the big shop" in one of its warehouses, but is still looking for gallons of peanut butter. This customer is likely less concerned about price, and won't balk at paying a few extra dollars per item.

That still gives most of its customers a good reason to head to the store, where the store's layout can entice customers to pack more into a single trip.

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