(NEW YORK) — Costco’s warehouse retail competitor Sam’s Club has recently ramped up efforts for customer retention.
Both big-box stores are beloved for selling high-quality items at lower price points, which offers shoppers an easy way to buy in bulk and save some money.
Now, Sam’s Club has slashed its sign-up price to just $25 until the end of August to entice first-time members. The newly dropped rate is more than half off the annual membership of the store’s biggest competitor, Costco.
“By them slashing the price of their membership, especially for new members, this is one way to try to get people are excited about the offerings of Sam’s Club,” retail analyst Hitha Herzog told ABC News’ Good Morning America.
But the wholesale giant has also caught some backlash after removing a key perk that is typically available to its plus members.
Starting mid-August, free shipping will only be available on qualifying purchases of $50 or more, pre-tax.
“In the last few years shipping and logistics around shipping has become extremely expensive,” said Herzog, the chief research officer at H Squared Research. “Sam’s Club is making an effort to cut costs by not offering free shipping on orders that are under a certain amount, but they are adding other benefits for members.”
Costco’s Gold Star and Business memberships, on the other hand, cost $60 a year, while an Executive membership that comes with added benefits such as travel rewards and roadside assistance, costs $120 annually.
Warehouse clubs also offer savings on more than just bulk items: From the pharmacy to travel programs, the other perks can add up and help members make more sense of the annual fees.
“You’re getting discounts on gasoline, on prescriptions and optical services,” Herzog said. “So, overall, you may feel like you’re paying more for that membership, but the perks actually give you added discounts that make it worth it.”
Top Costco savings tips
Whether you’re a newly minted Costco member or a seasoned sampler, here are some simple ways to save at the warehouse store.
Buy travel gift cards: Some airlines sell gift cards at slightly discounted price points, including $50 off for a $500 Southwest card.
Everyday essentials boast big savings: When it comes to savings at Costco, The Joy of Costco authors David and Susan Schwartz know a thing or two on the best-priced products thanks to more than five years of global research on Costco. They previously told GMA that two items are always on the top of their cost-effective shopping list, “paper towels and bath tissue.”
Travel deals from rental cars to vacation packages: The Schwartzes also encouraged fellow members to rent cars through Costco, which works with major car rental companies, offering 20% discounts on rates.
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