My wife and I are regular Costco shoppers. The membership warehouse has become one of the three grocery brands that we get most of our groceries from, pulling in at the #2 spot behind Trader Joe’s in annual spend these days. If we could get an even greater share of our groceries there, we would, but sometimes 96 ounce jars of mayo just aren’t practical.
I had always been curious about Sam’s Club, but had never given the chain a chance. With the recent AmEx promotion giving targeted AmEx customers a free Sam’s Club membership (in the form of a statement credit), we had nothing to lose. So, we decided to give it try, in the hopes that it could provide some nice staple complements to the items we regularly stock up on at Costco.
Now that I’ve shopped at both chains, I thought readers might have an interest in a Sam’s Club versus Costco review. So I’ve assembled one. I didn’t want to just provide my opinion, but wanted to really dig in to compare things like membership fees, return policies, branded credit cards, payment methods, hours of operation, number of locations, service offerings, item quality, price, and quantity, and even relationship with employees.
What follows is my take on the Sam’s Club vs Costco debate. I’d love to see yours in the comments as well.
A lot of the value of being a member is dependent on the perceived value you get from the price of membership. However, we’re just going to compare here on straight up price, not value (since everyone has a slightly different perceived value).
- Costco membership cost: $60 for the basic “Gold Star” or “Business” memberships, and $120 for the upgraded “Executive” version of each, which offers enhanced perks, including cash back rewards of 2% (up to $1,000) on qualified Costco purchases.
- Sam’s Club membership cost: $45 for the basic “Sam’s Saving” and “Business” memberships, and $100 for “Plus”, which offers enhanced perks, including cash back rewards of $10 for every $500 spent in qualifying purchases (up to $500 annually). Sam’s also offer “early shopping hours” for Business and Plus members, which is a nice perk.
Winner: Sam’s Club. If we’re looking strictly at price alone, you have to give the nod to Sam’s Club on this one, at all membership levels. Note that the enhanced membership for Costco offers a higher cap on cash back ($1,000 vs. $500), but you’d have to spend over $10K annually for that to even make a difference. That’s more than I’d recommend spending at any one retailer.
I have run the numbers on if a Costco Executive membership is worth the cost (as well as standard). The answer for me, is “yes”.
Costco’s and Sam’s Club return policies can be found here, respectively:
Winner: Costco (slight edge). Both Costco and Sam’s Club have refreshingly generous return policies, which makes shopping at either a huge perk. For starters, both offer full refund on the cost of membership if you are unsatisfied with it. Both offer return of items at any time. There are some items that come with time restraints at both retailers for good reason (i.e. electronics, cigarettes, and alcohol). Where Costco gets the slight edge is that they have a much shorter list of non-returnable items or items that must be returned within a time frame.
Branded Credit Card Perks:
For this comparison, I think it’s important to look strictly at how the card benefits you at the retailer, versus it’s other perks.
- doubles as your membership card
- $0 annual fee (must be a Costco member)
- 4% cash back on gas purchases at Costco and other gas stations (up to $7,000 spent per year)
- 3% back on restaurants and most travel purchases
- 2% back at Costco and Costco.com
- 1% cash back on other purchases
- doubles as your membership card
- $0 annual fee (cash back reward check only goes to Sam’s Club members)
- 5% cash back at U.S. and Puerto Rico gas stations and on gas at Sam’s Club (on first $6,000 per year in purchases, then 1% on purchases after)
- 3% cash back on dining and travel
- 1% cash back on other purchases
Winner: Costco. The Sam’s Club credit card has a really sweet perk in 5% cash back at all gas stations that might make it worthwhile, even if you don’t regularly shop at Sam’s (note: to get cash back rewards, you must be a Sam’s Club member). However, if we’re weighing the value of these cards on their connection to the retailer, the 2% cash back at Costco and Costco.com is a huge perk that stands out between the two cards, as it doubles the 1% you would get at Sam’s with the Sam’s Club MasterCard. The Costco card rewards improvement emerged from the huge shift from AmEx to Citi earlier this year.
- Costco payment methods: Costco accepts all Visa cards, Costco credit cards, cash, checks, debit/ATM cards, EBT and Costco Cash Cards. Checks may require picture identification and approval by a supervisor or manager. Cash, checks and EBT are not accepted at Costco Gas Stations or Costco Car Washes.
- Sam’s Club payment methods: Sam’s Club credit, Walmart and Sam’s Club credit cards, cash or check, debit card, American Express, MasterCard, Discover, Visa credit cards, WalMart credit, SNAP.
Winner: Sam’s Club. Costco’s move to Visa (all cards) should result in easier payment for a lot of customers (versus AmEx exclusivity previously), however, Sam’s Club accepts the four major credit card providers: AmEx, Visa, Discover, and MasterCard.
Number of Locations:
Number of locations is less important than proximity to your residence. Be that as it may, more locations increases the potential that there will be a closer location to your residence.
- Costco locations: as of the time of publish, Costco has 518 US locations.
- Sam’s Club locations: as of the time of publish, Sam’s Club has 597 US locations.
Winner: Sam’s Club.
Hours of Operation:
- Monday – Friday: 10 AM – 8:30 PM
- Saturday: 9:30 AM – 6:00 PM
- Sunday: 10 AM – 6 PM
- Monday – Friday: 10 AM – 8:30 PM (note: Sam’s offers “early shopping hours” for “Plus” and “Business” members only are 7 AM – 10 AM).
- Saturday: 9 AM – 8:30 PM (early shopping hours for “Plus” and “Business” members only are 7 AM – 9 AM).
- Sunday: 10 AM – 6 PM
Winner: Sam’s Club. Sam’s offers longer hours on Saturday and the early shopping hours for Plus and Business members.
- Costco item selection: Costco claims to carry only about 4,000 SKU’s. For the size of their warehouses, this is somewhat hard to believe, but they focus on fewer items as part of their strategy of focusing on quality.
- Sam’s Club item selection: Sam’s Club hasn’t shared the number of SKU’s that they carry, however, it is clear that they pack significantly more SKU’s into their locations than Costco does.
Winner: Sam’s Club.
- Costco item quality: Costco’s choice to limit (and even cut back) their SKU’s has allowed them to focus more on quality of item. Costco’s food and alcohol selection (if that’s your thing) includes a strong lineup of generic “Kirkland” branded products, which are typically very high quality. I created a Costco alcohol price list for those who are curious.
- Sam’s Club item quality: while Sam’s Club did carry a few higher end products and organic options, I found the overall selection here to be limited compared to Costco. If name brand products is your thing (I wouldn’t recommend it), you will be much happier with the familiar brands at Sam’s Club. If organic and healthy options are your thing, you will not. Random related note: I bought a giant container of black pepper at Sam’s Club that absolutely ruined a few dishes due to its poor taste. I just don’t think that would happen at Costco.
Winner: Costco. I tend to be pretty judicious when it comes to what I put in my body and Costco’s food selection is much more focused on items that are organic, with simple natural ingredients with less preservatives and fillers, and raised with a more sustainable focus (i.e. hormone-free, cage-free, grass-fed dairy, meat, and eggs). At Sam’s Club, there is much more of a focus on popular brands, which non-coincidentally often have much less healthy ingredients, in general.
Winner: Inconclusive (but possible slight edge to Costco). This one is tough because of the difference in product selection and product attributes. Costco has fewer SKU’s and generally higher quality products, which makes price comparisons difficult, if not impossible. I actually brought in my Costco receipts and used my phone to compare prices on similar items (i.e. similar volume and qualities such as organic).
Costco does have a notably larger selection of products with its high-value generic “Kirkland Signature” store brand, whereas Sam’s Club is much more focused on popular (and often overpriced) name brands. I think that’s important to note.
In a very limited sample size, I found Costco to come out ahead about 2 out of every 3 apple-to-apple comparisons (excluding brand name). Could this be due to limited SKU (which cuts cost for the company)? It’s possible. But I don’t have a broad enough sample size to conclude this definitively. And every individual shoppers results are going to vary based on their purchase preferences.
Buying groceries is one thing, but what about other service based product offerings? These are membership retailers, so the service part of the deal is important to a lot of members. Here’s what they both offer:
- Costco service products: pharmacy, cheap flu shots, optical/hearing center, tire/battery, gas, photo, business services, travel, auto-buying program, in-store restaurant, insurance.
- Sam’s Club service products: pharmacy, cheap flu shots, optical/hearing center, tire/battery, gas, photo, business services, travel, auto-buying program, in-store restaurant, insurance.
Winner: Tie. Do the lists look similar? They are. I’d give Costco the slight nod in group insurances offered and Sam’s the nod in other business services. Other than that, they are strikingly identical, right down to the types of foods offered in the in-store restaurant and their prices (frozen yogurt and pizza, FTW!).
Employee Pay & Benefits:
Last but not least, I think it’s important for any consumer to place a value on how well the businesses they frequent choose to treat their rank and file employees in terms of pay, benefits, work hours, holidays, and more.
Costco Pay & Benefits:
- Costco pay: cashiers @ ~$15/hour, stockers @ ~$13.50/hour
- Costco benefits: Health, dental, life, disability, AD&D, vision, pharmacy plans. 401K match (annual contribution to their account, which is based on a percentage of eligible earnings. This percentage increases with employee’s years of service). Employee stock purchase plan.
- Costco work hours: see above.
- Costco Holidays (no business hours): New Year’s Day, Easter, Memorial Day, Independence Day, Labor Day, Thanksgiving, Christmas
Sam’s Club Pay & Benefits:
- Sam’s Club pay: cashiers @ ~$10/hour, stockers @ ~$11.00/hour:
- Sam’s Club benefits: Health, dental, life, disability, AD&D, vision, pharmacy plans. 401K match (up to 6% of salary). Employee stock purchase plan (with company match).
- Sam’s Club work hours: see above.
- Sam’s Club Holidays (no business hours): New Year’s Day, Easter, Thanksgiving, Christmas
Winner: Costco. Without getting full PTO details and insurance costs, it’s difficult to fully compare the benefits package between the two. But when it comes to pay (at least in the samples that have reported their pay to a 3rd party), Costco is the clear winner, with cashiers making almost 50% more and stock staff making about 25% more, on average, than their Sam’s Club counterparts. It’s also been said that Costco pay increases happen more frequently and there is a much higher cap than with Sam’s Club/WalMart employees. Additionally Costco employees don’t have the potential to get drawn into extended morning and Saturday hours as Sam’s Club employees do, or 3 additional holidays to work (Memorial, Independence, and Labor Days). And then there’s reputation. Costco has been said to treat employees very well, while WalMart has a long history of the opposite (and only just recently raised employees to the $10 pay level).
Sam’s Club Vs. Costco: Overall Verdict
If the name of the game is saving money and you don’t care too much about the ingredients in the foods that you put into your body, you may be able to save some money at Sam’s Club. And you may have a little more luck finding the product type you are looking for. Sam’s also gets the nod in hours of operation and membership cost ($10 savings per year).
It’s worth noting that even though I’ve been a loyal Costco customer, I visited Sam’s Club wanting it to succeed (the more cheap foods for me to stock up on, the better!). However, having shopped at both and doing significant research for this article, I simply like Costco much more. Their huge selection of generic Kirkland brand products provide an excellent value, and their foods are more focused on quality and health. I come away from Costco with a full cart of products every time, but with Sam’s, I could only find a few handfuls of products that I felt good about purchasing. I feel much better about maintaining a cost of membership at Costco and don’t believe I will renew my membership at Sam’s unless they significantly increase their organic selection in the next year. The Costco Visa, with its 2% cash back rewards at Costco is another huge perk. Additionally, Costco pays and treats its employees better, which makes me feel more positive about being a customer.
Update: in light of the January, 2018 news of Sam’s Club closing 63 stores and laying off 10,000 employees without warning, I feel even more strongly about this verdict, and highlighted how to get your Sam’s Club membership fee refunded and switch to Costco.
Costco Vs Sam’s Club: what’s your take?