Americans are serious about their warehouse club memberships as it has grown to become a billion-dollar boon for big box retailers in the U.S. over the past few decades. Sam’s Club and Costco (COST) are the top two warehouse clubs in the nation, and the plot between the two just thickened as Sam’s Club just made a major policy change that is causing customers to rethink their membership and consider joining its top rival.
Sam’s Club, which is owned by Walmart (WMT) , recently announced that its Plus members will have until August 18 to enjoy a major perk that currently comes with their membership. The club is revoking free shipping for online orders under $50, and it will only offer it for “qualifying orders of $50 or more,” according to an email that was sent to members.
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Also, members who don’t have $50 worth of qualifying items in their cart online will have to pay a flat $8 shipping fee, but the company stated in the email that “some category exclusions apply whereby variable shipping will be charged.”
The move from Sam’s Club sparked outrage from its Plus members on social media who are threatening to end their membership and join Costco, which has gained over 20 million new members since 2020.
@SamsClub Since you are doing away with free shipping for Plus Members (other than +$50 orders), will you be reducing our annual membership fee? If not, I will be moving to Costco when my current membership elapses. Bad business move!
— Wade Dukes (@WadeDukes) July 7, 2024
@SamsClub I see what you’re doing there, charging shipping for below $50. I will not be renewing my plus membership unless you reverse course. I’m up for renewal yesterday and I don’t autopay.
— Gocru89 (@gocrumom) July 7, 2024
@SamsClub what genius there decided to take away the one factor that made your plus membership worth keeping with the free delivery? Please explain why going to Costco shouldn't be the next move? This is a terrible decision.
— Jack Lambert's Tooth (@blitzburgh058) July 7, 2024
In a tweet reply, Sam’s Club claimed that by adding a cart minimum, it is “increasing access to different ways of shopping” for its Plus members, and it will make it “easier” for them to purchase the products they want online. The company didn’t add any further details on how that would be done.
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Sam’s Club Plus members already pay $110 a year for exclusive benefits that don’t come with the basic membership, which costs $50 annually. One of those benefits that are advertised for a Plus membership include free shipping, so it is no surprise that some members are peeved about the upcoming change.
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The new policy comes after Walmart revealed in its first-quarter earnings for 2024 that it brought in $21.4 billion from Sam’s Club net sales in the U.S., which is a 4.6% increase from what it earned during the same time period last year. Walmart also revealed that its Sam’s Club membership income increased by 13.3% during the quarter, “with record total membership and Plus penetration at quarter end.”
The limits on free shipping also follows the Sam’s Club's increase on membership fees in October 2022. The fee for a basic Sam’s Club membership increased from $45 to $50 a year, while the price for a Plus membership rose from $100 to $110.
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