There's a reason so many consumers are willing to spend their hard-earned money on an annual
membership fee to Sam's Club: The warehouse chain has some amazing deals on great products.
But whether you're a member or thinking about becoming one, there's a few things you should
know about Sam's Club.
In January 2018, Walmart announced that they would be closing 63 Sam's Club stores nationwide
and turning them into fulfillment centers for online orders.
"So the store actually's going out of business?"
"Really?"
"And they didn't say nothing?
It wasn't even on the news?"
According to CBS News, CEO John Furner said:
"We know this is difficult news for our associates, and we are working to place as many of them
as possible at nearby locations."
A controversy erupted over the thousands of employees that had been unceremoniously laid
off.
The announcement came on the exact same day that Walmart announced it would be raising
its minimum wage to $11 per hour.
"I'm going back home now.
I see that they're closed.
Mmnn!
Without any kind of warning or notice or anything.
They could have at least let us know."
According to the Washington Examiner, the company had also announced that they would
be giving employees up to $1000 in bonuses because of new tax cuts.
Business Insider reported that most of the laid-off employees weren't even aware of what
was happening until they showed up for work that day.
Some learned of the store closings because of signs on the locked doors.
Clearly, a lot of people felt the store closings were handled poorly, and it's hard to disagree.
"This store… this store is closed?"
"Permanently closed!
The whole store!"
"Oh my gosh."
"A former transgender employee claims her coworkers and managers harassed her over her
gender identity."
In 2017, Sam's Club was sued for discriminating against a transgender employee, and the case
attracted a lot of attention.
According to the Chicago Tribune, Charlene Bost claimed her coworkers had been calling
her names like "it" and "thing."
Bost said she was repeatedly harassed by her direct supervisor, who reportedly called her
"it" in front of other employees and took part in unwanted physical contact, along with
writing fake infractions against Bost that led to her being fired.
Bost asked for unspecified monetary damages and wanted the court to order Sam's Club to
train employees in order to prevent future harassment of other transgender employees.
In 2015, former Sam's Club CEO Rosalind Brewer, the first woman and first African-American
to lead a division within Walmart, came under fire for comments that some perceived as prejudice
against white men, if you can believe it.
In a 2015 interview with CNN, Brewer discussed the diversity of her team:
"Even with myself, I have to live it also.
My executive team is very diverse, and I make that a priority."
Brewer added that diversity, or lack thereof, was something she often had to discuss with
her suppliers:
"Just today we met with a supplier, and the entire other side of the table was all Caucasian
male.
That was interesting."
She added that she didn't want to talk at that meeting since there were no females present,
and claimed that she was, quote, "going to place a call" to the supplier about it.
Her comments immediately received an outlandish backlash on social media, with people obnoxiously
calling Brewer "racist" and using the hashtag #BoycottRacistSamsClub to rally supporters.
Meanwhile, plenty of people were disgusted by the campaign.
In a statement, Walmart President and CEO Doug McMillon fully supported Brewer:
"Roz was simply trying to reiterate that we believe diverse and inclusive teams make for
a stronger business.
That's all there is to it…."
Like most warehouse stores, Sam's Club is known for selling brand-name items at significantly
lower prices than the competition.
"You can see three quarters of our incremental sales already this year have come from those
new, better-for-you items.
You're gonna love that product."
"Thanks."
"You bet.
And I'll tell you what..."
But as it turns out, they reportedly haven't always had permission to sell the goods they
advertise.
One example is when the bicycle company Trek publicly expressed their shock at its bikes
being sold at the warehouse.
In 2016, Sam's Club listed some men's and women's Trek mountain bikes on its website.
The bikes were only available online... for $100 less than the prices on Trek's official
website.
A Trek spokesman told BRAIN that Sam's Club, quote, "did not acquire them from Trek directly"
and said they were investigating how the warehouse club had gotten the bikes.
He added:
"Trek has no plans to sell bikes at Sam's Club or any other big box retailer."
There was a similar issue with designer brand Fendi in 2006.
CNN Money reports that the brand sued Sam's Club for selling knock-off handbags, wallets,
and key chains at its stores, writing that:
"Walmart does not have a purchasing agreement with Fendi or anyone affiliated with the company."
The bags were being sold at significantly discounted prices, as low as two-hundred and
ninety-five dollars in some cases.
Meanwhile, Fendi claimed that the original version would retail for nine-hundred and
twenty-five dollars.
A spokesman defended Walmart in a statement, writing:
"... the company policy prohibits the retailer from selling knock-offs..."
Sam's Club stores each feature a sprawling pharmacy section, which has proven to be quite
convenient for shoppers.
But in 2018, the company got in some trouble with Medicaid.
According to a press release from the U.S. Attorney's Office for the District of Minnesota,
there was a complaint that both Walmart and Sam's Club pharmacies regularly enrolled Medical
Assistance beneficiaries in the companies' auto-refill program and then billed Medicaid
for prescriptions.
This was a violation of state rules and regulations, as Minnesota doesn't allow pharmacies to automatically
refill prescriptions paid for by the state's Medicaid program without an explicit request
from the beneficiary.
Allegedly, employees at the pharmacy were the first people to report this violation
to the company managers, but even after they did, Walmart and Sam's Club kept automatically
refilling prescriptions.
In the end, Walmart Stores, Inc. and Sam's West, Inc. agreed to pay a total of eight-hundred
and twenty-five thousand dollars to resolve False Claims violations.
The way that Sam's Club treats employees has reportedly stirred up quite a bit of controversy
over the years, as evidenced by two separate lawsuits.
In 2002, The New York Times reported a class-action lawsuit, as well as individual lawsuits, against
Walmart and Sam's Clubs across twenty-eight states.
The controversy stemmed from the company allegedly refusing to pay employees for work they performed
off-the-clock.
One former employee, Verette Richardson, claimed that she sometimes worked for up to three
hours without getting paid, saying:
"They wanted us to do a lot of work for no pay.
A company that makes billions of dollars doesn't have to do that."
In response, a Walmart spokesman said:
"Off-the-clock work is an infrequent and isolated problem, which we correct whenever we become
aware of it."
Unfortunately, there have been other similar lawsuits since then.
According to NBC, a California jury awarded Walmart workers one-hundred and seventy-two
million dollars for illegally denied lunch breaks in 2006, while they settled a similar
case in Colorado for fifty million dollars.
That same year, a judge approved a class-action lawsuit against Walmart Stores Inc. by employees
in Pennsylvania who said they were pressured to work off-the-clock.
And in 2018, Class Action reported a lawsuit against Walmart and Sam's Club that claimed:
"... employees have ended up performing pre- and post-shift off-the-clock work without
being paid commensurate wages, including time-and-a-half overtime pay."
"Want some cookies to go with that milk?
Sam's Club charges $19.98 for a five-pound tub of chocolate chip bakery cookies.
Costco charges $15.55!"
The allure of shopping at a place like Sam's Club isn't just buying food in bulk, it's
mainly about saving money on necessary household items.
But the value of the products that Sam's Club sells has raised a lot of questions.
A 2016 Fox Business report claimed that you might not be saving quite as much as you think
with your trusty Sam's Club membership.
The report points out that prices are indeed lower at a place like Sam's Club when compared
to a store like BJ's or traditional grocery stores.
But Michael Clayman, editor and writer at Warehouse Club Focus, told The Motley Fool
that the results of price reporting,
"... show the dramatic savings a consumer receives by shopping at a club compared to
the other two."
But here's the thing: It's not just about price.
Billie Blair, an organizational psychologist and CEO of Change Strategists, Inc., pointed
out the added cost of what he calls "wastage from overbuying," noting:
"Warehouse clubs almost never save money for the individual shopper."
Basically, if you're habitually throwing away food because you bought too much of it, plus
paying an annual fee, you probably aren't really saving anything.
Sure, if you shop smart by buying only what you need and will use, then you have the potential
to save, otherwise, you're more-or-less out of luck.
It may have been proven that prices at Sam's Club are on the lower end of the spectrum
when it comes to other big box retailers and grocery stores, but that doesn't mean that
everything is a great buy.
Experts told Market Watch that some items like car parts, medication, and alcohol are
almost always a good deal, but plenty of other items aren't worth buying in bulk.
"Your credit card called.
They want to make sure you're the one buying cream soda in bulk.
"I sure am."
According to experts, books, CDs, and DVDs can be found cheaper on Amazon.
Jon Lal, CEO and founder of Be Frugal, said to avoid buying food perishables, such as
condiments like mayo.
That's because those bulk items will probably go bad since there's really no way to consume
them in time.... no matter how much you pour into your dinner.
"Let's just let this all come together, bind together, that's sort of the virtue of mayonnaise!"
Erin Konrad, a spokesperson for Coupon Pal, said that diapers can be found cheaper at
places like Target and Amazon.
"Whoa, we get new diaps?
Easy on the lumbar there, sport."
Matthew Ong , the retail analyst for NerdWallet, told Market Watch that laundry detergent in
bulk can lose its efficacy quickly, meaning you'll probably waste money because you won't
be able to use all the detergent in time.
Lastly, Konrad and Ong agreed that paper goods like toilet paper and tissues can be found
cheaper at Target or grocery stores with coupons.
One of Sam's Club's biggest competitors is Costco, another big box retailer known for
great prices and for treating its employees very well.
Costco has been praised for excellent wages and benefits, and it seems that Sam's Club
simply can't compare.
In 2008, Slate reported that Sam's Club employees made a starting wage of ten dollars an hour
and made twelve dollars and fifty cents after four and a half years.
Meanwhile, a new Costco employee started at eleven dollars an hour, made nineteen dollars
and fifty cents per hour after working there for four and a half years, and received a
bonus of over two-thousand dollars every six months.
There are a few reasons for this.
According to Slate, Costco sells pricier items than Walmart and Sam's Club.
Costco employees can also be members of the Teamster's union, but not Walmart employees.
So why doesn't Sam's Club offer the same wages?
Tim Worstall at Forbes believes it may do more harm than good:
"[About] seven hundred thousand people would lose their jobs at Walmart.
Which is, I think you'll agree, a fairly large result…"
In 2014, Sam's Club was slapped with a class-action lawsuit over its freshness guarantee.
A South Carolina customer claimed that Sam's Club had repeatedly violated the language
of that promise, which said customers were entitled to a,
"... 200% money-back guarantee on all fresh meat, seafood, bakery and produce.
Non-Members receive 100% money-back guarantee."
The disgruntled customer claimed that she'd returned a significant amount of, quote, "fresh
meat, bakery, and produce items" over the years.
She insisted that she'd never been refunded more than the purchase price of an item, nor
was she offered the return purchase plus a replacement product.
The lawsuit claimed:
"Sam's has failed to honor the 200% Freshness Guarantee for many thousands, if not millions,
of its members."
According to Top Class Actions, the class action settlement resolved this claim in 2018,
along with a similar but separate case filed in California, with Sam's Club offering a
$6 million settlement fund.
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