Costco and Sam’s Club often operate across the street from each other.
When they don’t, most consumers pick the location closest to them, because for many Americans, joining a warehouse club means driving longer distances than shopping at traditional grocery chains.
“Research shows that the average travel distance to a warehouse club can be more than 15 miles, compared to less than 5 miles for traditional grocery stores,” according to an academic study by Concordia University graduate student Hala Essabik.
As a consumer, I mildly prefer Costco’s product selection and food court over Sam’s Club’s, but I would not drive more than a few extra minutes if the Walmart-owned brand was closet to my house.
Sam’s Club actually outscored Costco on the recent American Customer Satisfaction Index (ACSI) report, 85 to 82, but both of those scores are above any other retailers except for Macy’s and the TJX Brands, which both scored an 82.
It’s fair to say that Costco and Sam’s Club offer fairly similar value propositions to members, so any changes might tip a customer from one chain to the other. Costco has made a recent change to its credit card offering, which could save members an additional $1,000 per year over Sam’s Club members.
Related: History of Costco: Company timeline and facts
Costco makes a key credit card change
Costco has increased its cash back on gas from its own gas stations from 4% to 5% for people who pay with the Costco Anywhere credit card from Citi. The warehouse chain’s gas stations only take credit and debit cards. You cannot pay with cash.
Costco CFO Gary Millerchip sees the change as a way to make membership more valuable.
“And then we’re committed to continuing to improve the value of the membership. We’ve made some major changes recently with the extended opening hours, the Instacart benefits, and 5% gas on the credit card, but we’ll continue to look for ways to add greater membership value,” he said during Costco’s first-quarter earnings call.
Costco caps its annual cash back at $7,000 than drops to 1% on any further fuel or EV charging spending.
More Costco from Daniel Kline:
- Costco has big plans members need to know
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- Costco makes key shopping changes in-store and online
Sam’s Club’s card only offers 5% cash back on gas up to $6,000, according to Synchrony Bank’s web page for the card.
The Costco card, however, only gives 4% cash back on gas purchases at non-Costco gas stations, while the Sam’s Club card offers the 5% anywhere you fill up.
Still, someone using the Costco Citi Anywhere card has the potential to earn an extra $1,000 per year.
Members I have spoken with have told me that they plan to max out the benefit, and it’s enough of a perk that I may consider the Costco Citi Anywhere when we move close enough to a Costco to make that practical.
The challenge, and remember that this is per household, you need to spend over $500 on gas each month to reach the Sam’s Club $6,000 threshold and more than that to benefit from the higher cap at Costco.
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Costco doubles down on gas
In addition to the credit card change, Costco has made another major change at its gas stations.
“We also extended our gas station hours in North America during the quarter to make filling up at Costco more convenient for our members. Generally, our stations are now staying open an hour later than they did previously, with some opening earlier as well,” CEO Ron Vachris shared during the chain’s second-quarter earnings call.
Costco’s Citi Visa gas cashback offer factors into The Points Guy suggesting that the credit card is a good one for families, but it did point out one small issue.
“It’s worth pointing out that you’ll earn just 1% back (not 5% or 4%, respectively) on gas and EV charging purchases from superstores, supermarkets, convenience stores and warehouse clubs other than Costco or on fuel purchases that aren’t for automobiles (such as jet or boat fuel),” the site wrote in its review of the Costco Anywhere Visa by Citi.
Costco and Sam’s Club generally offer gas at some of, if not the lowest prices, in any given market.
“Spring weather may be weeks away in much of the country, but the seasonal rise in gas prices is underway. The national average for a gallon of regular gasoline went up by more than 5 cents this past week to $2.98,” according to data from AAA.
Refineries are beginning the process of producing summer-blend gasoline, which contains pricier additives to help reduce evaporation during warmer months. Gas demand is also expected to increase next month as spring break season kicks off and more drivers take road trips, AAA shared.
