Sam’s Club adds Visa to payment forms it will accept

Discussion
Photo: Walmart/Sam’s Club
Jan 21, 2016

The rule used to be that when you walked into a warehouse club, the cashier would accept only one form of credit or debit card as payment. That is no longer the case as Sam’s Club has announced that the company will now accept Visa beginning on Feb. 1 in addition to American Express, Discover and its own branded credit card.

“Everything we do is in an effort to better serve our members and extend the value of membership,” said Tracey Brown, chief member officer at Sam’s Club, in a statement. “By accepting Visa credit cards, we are giving our members more ways to shop that are convenient for them.”

“Sam’s Club is the eighth largest retailer in the U.S. and we are thrilled to open up Visa credit acceptance in their more than 650 clubs across the U.S. and Puerto Rico,” said Ramón Martín, senior vice president, merchant solutions, Visa Inc. “Whether in person or online, our goal is to ensure payments are fast, easy and secure for cardholders everywhere they wish to shop.”

While Sam’s is expanding the cards it takes in its clubs, Costco currently only accepts Visa. Costco.com, however, does take American Express, Discover, MasterCard and Visa for online purchases.

Do you think it is the right or wrong move for Sam’s to expand the forms of payment it accepts in its clubs? How likely is Costco to follow Sam’s lead and add other credit cards to those accepted in its clubs?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I’d say quite obviously the easier you make it for shoppers to pay, the more likely it is you will capture the purchase. Ever see first-time Nordstrom customers stomp out of the store when they realize their Visa debit card isn’t accepted?"
"Good for Sam’s Club. Costco might follow Sam’s. On the other hand, Costco is the world’s largest club store, at $100B+ in annual sales. It makes decisions based on maximizing that topline and bottom line."

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16 Comments on "Sam’s Club adds Visa to payment forms it will accept"


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Chris Petersen, PhD
Guest
6 years 4 months ago

The customer is the new Point-of-Sale.

In this age of omnichannel, consumers are in charge of how they shop, where they shop, where they purchase and how they choose to pay.

It is absolutely the right move for Sam’s to expand forms of payment it accepts in clubs. It is not only a sign of the times, but a critical component of maintaining a relationship with the most profitable customers. And by the way, Amazon gladly accepts many forms of payment.

Brian Numainville
Guest
6 years 4 months ago

Yes, absolutely a positive consumer-focused move. Nothing more irritating than wanting to spend your money at a store only to be told that your form of payment isn’t welcome. That has long been my dislike at Costco — and now that they have me trained to use American Express they are changing to Visa (which I would have preferred in the first place)!

Max Goldberg
Guest
6 years 4 months ago

It’s a great move for consumers but will increase Sam’s cost of doing business. That increased cost of business needs to come out of corporate profits or show up in higher prices. I, like other Costco members, am waiting to see what the switch from American Express to Visa will mean. Until that change is made and has some time to settle with customers, I don’t expect Costco to accept other cards.

Mel Kleiman
Guest
6 years 4 months ago

If you are a retailer you make it as easy as possible for customers to shop with you the way they want to shop. That includes taking all kinds of payments.

Personal example: I am very unhappy that Costco is doing away with American Express. They will be losing a lot of my business since I have both a Costco and Sam’s Club card and like the benefits I get with American Express.

Ryan Mathews
Guest
6 years 4 months ago

I’d say quite obviously the easier you make it for shoppers to pay, the more likely it is you will capture the purchase. Ever see first-time Nordstrom customers stomp out of the store when they realize their Visa debit card isn’t accepted?

As to Costco, they are halfway home already since they accept other payment schemes for online purchases. I’d say there is a better-than-average chance those other cards will also soon be accepted in-store.

Steve Montgomery
Guest
6 years 4 months ago

Adding to its payment options is sure to please Sam’s customers. Even if they carried one more of the cards previously accepted, having an additional choice is never going to be a negative.

Will it garner a significant new customer base? Highly unlikely but it might position Sam’s as a more welcoming place to shop than Costco with its single payment option.

Camille P. Schuster, Ph.D.
Guest
6 years 4 months ago

Consumers may have to carry two cards for Sam’s: one to show membership and another for purchases. If that is not cumbersome for consumers, the switch will work well. Costco is about to roll out their new credit card/membership arrangement while exiting their old arrangement with American Express. The process is probably too far along to take this current information into account.

Ben Ball
Guest
6 years 4 months ago

The value in the single card system used to be that the retailer and issuer passed along the exclusivity benefits of the deal (or a portion of them) to consumers in the form of enhanced rewards. The rewards of my Amex Costco card are now no better than many others — including the replacements Amex is offering me.

Take ’em all.

Li McClelland
Guest
Li McClelland
6 years 4 months ago

It’s about time someone broke this quirky barrier to warehouse club buying. Having only one card was meant to make membership seem “exclusive” and of course was slightly more profitable for the warehouse club because of their deal with the credit card company. But it has always irritated customers of both Sam’s and Costco. Yes, Costco will follow suit after a decent interval — they’ll almost have to.

Naomi K. Shapiro
Guest
Naomi K. Shapiro
6 years 4 months ago

It’s the right move for Sam’s to expand the forms of payment accepted. So should it be for all retailers. Make it as easy as possible to pay with whatever form of card the customer wishes to use — that is the formula to stop people from thinking at all about where to go because of which card is accepted.

I think Costco made a big mistake with accepting only one card and a big mistake with switching.

Make it all a no-brainer as the formula to keep them coming — to you!

Ed Rosenbaum
Guest
6 years 4 months ago

“Show me the money.” The line from the movie, Jerry Maguire, sums it up. What the customer uses is for money is becoming less important than how to get that money in the business. So, if a warehouse club wants my money, they will need to accept my form of cash.

Karen McNeely
Guest
6 years 4 months ago

I don’t see how there can be a downside. If I’m not mistaken, VISA is the most widely held credit card, and unless they had negotiated a great deal with Amex, the merchant fees are lower as well.

In general, fewer people are carrying cash, or heaven forbid — checks. This policy better aligns with the way people today shop.

Dan Frechtling
Guest
6 years 4 months ago

Good for Sam’s Club.

Costco might follow Sam’s. On the other hand, Costco is the world’s largest club store, at $100B+ in annual sales. It makes decisions based on maximizing that topline and bottom line.

Costco is paying 0% on interchange with the new Visa deal, according to Bloomberg. The incentives from Visa and its issuer, Citigroup, offset an estimated .4% on Visa cards Costco will accept from other issuers.

Costco has a gross margin challenge. Average markup is ~15%, though it charges a membership fee. Sam’s is becoming more competitive, so increasing markup will be difficult. Costco is driving private label, but many of those gains have already been achieved.

Visa is a topline and bottom line win for Costco. Accepting a card with a higher installed base AND adding rewards should grow topline and membership. With gross margins at ~13%, cutting the .6% paid to Amex to 0% with Visa equals 60 bp of GM growth, or about +5% to the bottom line.

Craig Sundstrom
Guest
6 years 4 months ago

Welcome, Sam’s, to the 1990s: you’ll do well here.

There’re two widely used cards and two lesser used cards in the US, and once a retailer decides to accept plastic, I don’t see a real reason not to accept, if not all four, then at least the first two. Oh sure, a heavyweight like Costco has enough pull with the issuers to negotiate exclusive contracts, and they probably have enough loyalty with their customer base to say “or else,” but why go out of your way to be difficult? There’s enough competition in the membership club field that giving your competitor an edge by being a card snob doesn’t seem worth it.

Dan Lyons
Guest
Dan Lyons
6 years 4 months ago

Good move for Sams. We get frustrated by not being able to use certain credit cards at Sam’s.

Jerome Schindler
Guest
6 years 4 months ago

Sam’s Club obviously is playing second fiddle to Costco and is desperately seeking ways to improve their position. The new member bonus offers they continually float to expand membership is evidence of that, as is this addition of accepting VISA cards. I think Costco’s members will make sure they have whatever card they need to shop there. No need for Costco to expand the choices. You can bet Costco gets paid for their card exclusivity.

wpDiscuz
Braintrust
"I’d say quite obviously the easier you make it for shoppers to pay, the more likely it is you will capture the purchase. Ever see first-time Nordstrom customers stomp out of the store when they realize their Visa debit card isn’t accepted?"
"Good for Sam’s Club. Costco might follow Sam’s. On the other hand, Costco is the world’s largest club store, at $100B+ in annual sales. It makes decisions based on maximizing that topline and bottom line."

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