- Costco sells millions of dollars of gold bars a month.
- While the bars get snapped up quickly, shoppers are learning that buying is easier than reselling.
- Trading commodities, as it turns out, is full of complications.
Whenever Costco releases a batch of gold bars for sale, the supply sells out "within a few hours" as shoppers snap up the precious metal for a small markup over its spot price.
The out-of-stock notices give the allure of a hard-to-get item, but the wholesale club is still moving a lot of gold bars and silver coins — to the estimated tune of $200 million a month.
But the Wall Street Journal reports that some buyers who have gotten their hands on a bar or two are now getting a crash course in the complicated world of trading commodities.
Gold bars are one of the few items that Costco does not allow returns, refunds, or price adjustments on, so the only way to get your money back is to find someone else who will buy it from you, and that's more complicated than some expected.
"It's not like trading stocks," New York-based appraiser Lark Mason told the newspaper. "There's a friction between what you pay and what you actually get."
One shopper, Adam Xi, encountered those frictions. He was hoping to use the $2,000 gold purchase to boost his credit-card points but then had to search for a buyer who ended up only paying him $1,960 for it, the Journal reported. Another managed to turn a $850 profit — after holding the bar for nine years.
Although gold has been used as a medium of exchange for thousands of years, it's not really considered currency in the modern sense.
Unlike cash or even gift cards, Costco classifies gold bars as collectibles, which may or may not retain their value over time.
For that matter, the Internal Revenue Service also considers gold bars as a collectible too, and demands as much as a 28% cut of any profits on gold held for more than one year.
The bars themselves might be fun to hold and look at, but between the possible interest, taxes, shipping, and other expenses — not to mention the hassle of finding a buyer — trading gold just might not be worth the trouble, even at Costco prices.