ShopSmart Says Sign Me Up!

~When Does it Pays to Join Retail Membership Clubs?~

YONKERS, N.Y., May 16, 2011 /PRNewswire-USNewswire/ -- Many online retail sites and walk-in stores have membership clubs that offer an inside track on savings. They often provide discounts, offer reduced shipping fees, and give special access to sales. The June 2011 issue of ShopSmart magazine, from the publisher of Consumer Reports¸ devised a formula and applied it to four programs to find out if they are worth signing up for.

"When joining a retail membership club is free, the decision is usually a no-brainer — but it's a different story when you have to pony up money," said Lisa Lee Freeman, editor-in-chief of ShopSmart. "With this formula, consumers can confidently determine if these membership clubs are offering them the best values."

How to do the Math:

1. Determine the monetary value of the program's benefits per order: For example, ShopSmart found that Overstock's Club O will save consumers $2.95 on standard flat-rate shipping for every order (plus delivery time is faster).
2. Estimate the number of times you'll shop at that website or store each year: ShopSmart went on the assumption that an average subscriber will shop six times per year. However, consumers who shop less might not find the programs as cost-effective.
3. Multiply the savings per order by the number of times you think you'll order per year: This number represents the amount of money a consumer can theoretically save if he or she enrolls in the plan.
4. Subtract the annual program fee from that amount: If the result is a positive number, then the program is worth the money because a consumer will be saving more than he or she paid for the program. However, if the result is negative, then the program should be skipped.

Retail Membership Programs:

Money Saver:   To find out whether a retailer offers a rewards program, ask a salesclerk or check the company's website.

Amazon.com's Amazon Prime

Price: $79 per year

Benefits: Free two-day shipping and $3.99 one-day shipping on most purchases (exclusions include Amazon Marketplace purchases). Amazon Prime also offers instant streaming of 5,000 movies and TV shows via Amazon Instant Video, which can be watched on a Mac, PC, and almost 200 TVs and Blu-ray players so far. Offers a one-month free trial.

Worth it?: Yes, if you plan on taking advantage of the streaming service in lieu of subscribing to Netflix, which costs $7.99 for streaming only. Amazon Prime is not worth the cost if you subscribe for the free shipping only, which can average around $9 per order, unless you place nine or more orders each year.

Overstock.com's Club O Rewards

Price: $19.95 per year

Benefits: With Club O, consumers receive five percent back on purchases to apply to future orders. Shipping is free on all orders of $25 or more for books, media, games, and movies, and all other orders ship free regardless of total. Club O also sends out notices for shopping events; at press time, those included three percent added to purchase rewards.

Worth it?: Yes.

About ShopSmart magazine:

Launched in Fall 2006 by Consumers Union, publisher of Consumer Reports, ShopSmart draws upon Consumer Reports' celebrated tradition of accepting no advertisements and providing unbiased product reviews. The magazine features product reviews, shopping tips on how to get the most out of products and "best of the best" lists. ShopSmart is ideal for busy shoppers who place a premium on time. ShopSmart has a newsstand price of $4.99 and is available nationwide at major retailers including Barnes & Noble, Wal-Mart, Borders, Kroger, Safeway and Publix. ShopSmart is available by subscription at www.ShopSmartmag.org.

ShopSmart is now available 10 times a year. Subscribe at www.ShopSmartmag.org.

SOURCE ShopSmart Magazine