On Monday, March 4, Sam's Club offered a one-year membership to new members (not for renewals) for $45. On the surface, it sounds like the normal price, but Sam's is also throwing in a $20 gift card to Sam's and $19.84 in food vouchers (fresh rotisserie chicken, 16-inch take-and-bake pizza and two boxes of freshly-baked cookies).
So why does Sam's Club do promotions and not Costco?
It could be that Sam's is hurting for customers, but George John, professor at the University of Minnesota's Carlson School of Management, said it's part of Sam's more promotional marketing strategy. Its customers respond more to a discounted membership promo than Costco's, he said. Consumers who are not sure if they can recoup a $45 annual fee can now test it for a year with even greater built-in return in the form of gift cards and food vouchers. (The gift card cannot be used toward the ourchase of a membership.)
Still, Sam's Club warehouse clubs do about half the dollar volume as Costco stores, said David Brennan, University of St. Thomas marketing professor. "With five Costcos in the Twin Cities and eight Sam's Clubs, Sam's Club may be testing this half-price offer to see if they can win new customers and/or lure them away from Costco."
Consumers who don't think they can recoup the membership fee even at a discount should remember both clubs' guarantee. If you aren't satisfied with your membership at any time, you can get a full-refund, not pro-rated.
The Living Social deal ends Tuesday and is valid in many markets around the country. Consumers who are not Living Social subscribers must sign up to get the offer. It's free, but those who sign up receive daily email offers.