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Sam’s Club is raising the bar on free shipping, following a trend that a new study shows is impacting retailers and customers across the country.
Sam’s Club Plus members pay an annual fee of $110 — $60 more than the basic membership — for premium benefits, including free shipping on most online items. But starting next month, the $8 shipping fee will be waived for Plus members only on orders of $50 or more.
Analysts say Sam’s Club’s upcoming policy update is part of a larger trend in retail, with companies making adjustments to combat rising shipping costs. About half of retail executives surveyed said they had raised the minimum fee for free shipping in the past 12 months, according to a May and June survey of about 100 retail executives by global consulting firm AlixPartners.
“They need to change policies to make home delivery and online delivery slowly but surely more profitable,” said Marc Iampieri, partner and managing director at AlixPartners. This is the third year the company has surveyed U.S. executives from retailers with revenues of at least $100 million.
Shipping and Delivery Changes for Sam’s Club
Sam’s Club’s new shipping, delivery and pickup policies go into effect on August 19 and apply to both Plus members and Club members (who pay a $50 annual fee).
- Shipping for Plus members: Free shipping is available on orders of $50 or more, and an $8 shipping fee is charged for non-qualifying orders. Sam’s Club warns “some category exclusions apply where variable shipping charges apply.” Starting July 9, Plus members will receive free shipping on eligible items with no minimum purchase.
- Same day delivery for Plus members: Free same-day shipping is available on eligible orders over $50.
- Curbside pick-up for club members: Club members have access to free curbside pickup “on qualifying items” when they spend at least $50. Currently, curbside pickup orders are only free for Plus members, and Club members must pay a flat $4 fee for curbside pickup orders.
Sam’s Club spokesman Steven Zapata said the changes are intended to “simplify the experience and cost of same-day delivery and shipping” and “provide better access to the items our members buy most.”
Some Sam’s Club members have expressed their displeasure online about the policy changes, but Zapata said the policy change has been “overwhelmingly positive” among members, who say it is “easy” to meet the $50 minimum.
“It’s not surprising that Sam’s Club is getting some pushback for this decision, but it’s probably the only way to keep its online business profitable,” said Blake Droesch, a senior retail and e-commerce analyst at research firm eMarketer. “The economics of delivery is one of the biggest challenges facing retailers today.”
Are there any more changes to free shipping coming soon?
Other companies have raised the bar on free shipping in recent years. Amazon began testing a $35 minimum for non-Prime customers to qualify for free shipping in late 2023, up from $25, according to reports from multiple outlets. Abercrombie & Fitch is offering free shipping on orders over $99, up from $75.
The higher thresholds can be partly attributed to inflation. Analysts say it makes sense for retailers to raise the threshold for free shipping to meet the new price of consumer goods, which has risen by more than 20% in the past three years.
“Fifty dollars today is not the same as $50 three years ago,” Iampieri said.
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Higher freight costs also play a role. A new study from AlixPartners finds that three-quarters of retail executives surveyed say their per-case delivery costs will increase between 2023 and 2024.
“(Online shopping) has always been expensive and it has always been a bit margin-sapping, but it’s now at a level where you can’t ignore those costs or just absorb them,” said Neil Saunders, managing director of analytics firm GlobalData. “You have to make the consumer pay a fairer share of the costs.”
