Customers flock to Sam's Club, a warehouse retailer and subsidiary of Walmart, to fill up on free samples, buy in bulk, and get their flu shots and eyeglasses in the same place they buy their bacon. Sam's Club is among the top shopping memberships, trailing just behind Amazon Prime and Costco in the number of subscriptions, according to an April 2022 retail report by Pymnts. With nearly 600 clubs in the United States and Puerto Rico, and locations in China, Brazil, and Mexico, the company has a wide fan base. By the end of 2023, Sam's Club generated just shy of $85 billion in total revenue.
But despite its popularity -- and the allure of an exclusive shopping experience behind those membership fees -- Sam's Club is not without its own controversies, secrets, and business model flaws. Unfortunately, the chain has had a few disappointing incidents that may change some loyal shoppers' minds about the wholesale giant.
Read more: All The Benefits Of A Costco Membership
The Company Has Faced Several Discrimination Lawsuits
Sam's Club has faced several discrimination lawsuits. Some of the legal action involved Sam's Club's beloved sample servers. In 2018, the U.S. Equal Opportunities Commission filed a lawsuit against Sam's Club for disability discrimination. Crossmark Inc., the company that partners with Sam's Club for staffing the beloved food demonstration stations, reportedly denied seating accommodations (such as stools and chairs) for employees with disabilities. In addition to denying requests, Crossmark fired employees who continued to ask. Since this case, petitions have cropped up on websites like Coworker.org advocating for better treatment of disabled and elderly employees.
While the lawsuit is against Crossmark, the EEOC document says that these incidents occurred at Sam's Club stores. While Sam's Club does participate in charity events to aid people with disabilities, the online petition and EEOC case show that the company has room for improvement in this area.
Additionally, Sam's Club also has a history of mistreating transgender employees. A Sam's Club employee in North Carolina filed a lawsuit against the retailer for creating a hostile work environment. Charlene Bost, a transgender woman, alleged that her employers intentionally misgendered her, harassed her for not conforming to gender stereotypes, and fabricated customer complaints to attempt to fire her. Bost added that her employers made no effort to stop or investigate repeated derogatory remarks from coworkers, including slurs for transgender people and inappropriate comments about her body. Walmart settled the suit in 2018 under undisclosed terms.
Customers Have Reported Issues With Gift Cards And Refunds
Freshness is not always guaranteed at Sam's Club. The company faced a class action suit over its failure to refund shoppers for expired products, including meat, produce, and bakery items. The $6 million class action settlement addressed complaints that Sam's Club was not honoring its refund policy on grocery items. Before this, Sam's Club had additional issues with food freshness, including recalls on ready-made meals, charcuterie meats, infant formulas, and salad kits.
The lawsuit surrounded the retailer's claim of a promised 200% refund on certain fresh products in its membership handbook. This refund never came to fruition for some shoppers in California and South Carolina, where customers filed two separate class action lawsuits. While Sam's Club did issue refunds, it was not the amount outlined. Sam's Club distributed settlement funds through gift cards for Sam's Club and Walmart stores.
But Sam's Club has had issues with its gift cards, as well, and another class action lawsuit was filed to address issues with the company's gift cards. Customers noted that, on multiple occasions, gift cards weren't loaded with the amount purchased. In other cases, customers experienced activation troubles. While some of these customers were eventually refunded, the issues caused a church charity drive to go wrong and for some customers to mistrust the company.
Sam's Club Was Accused Of Membership Fraud
Yearly memberships to shop at Sam's Club come at a price, $50 per year for a regular, Club membership and $110 per year for a premium, Plus membership. Shoppers expect to get what they pay for, and a 2010 lawsuit showed they may be getting shortchanged.
Shoppers in California claimed that stores deceived them by backdating their membership start dates and shortening their 12-month membership privileges. Stores were renewing memberships based on previous expiration dates, shortening the lifespan of the new sign-up. Sam's Club and membership warehouses thrive on memberships, and the company raked in about $1 billion from membership sign-ups, according to the lawsuit. The suit alleges that the backdating was intentional.
Membership card woes continue to haunt shoppers. Some complained that they were strong-armed into upgrading their memberships to the premium tier. In 2020, customers filed a lawsuit after the company cut the business-level membership card without much warning, leaving some members to have to upgrade on the spot to a premium membership to access the perks they were currently using under that level. Additionally, Sam's Club falsely told some customers that they would have to upgrade their membership and pay the difference for perks they could still receive with their basic membership level, such as early shopping hours.
There Are Ways For Shoppers To Lower Membership Costs
With subscription-based services becoming more popular, it's understandable why shoppers may hesitate to shell out another annual fee, despite some possible savings. Additionally, buying in bulk isn't ideal for everyone. Luckily, you likely won't have to pay full price to access Sam's Club.
As of January 2024, Sam's Club is offering a half-price deal on regular Club memberships. This is one of many membership discounts featured from time to time on the company's website. Additionally, coupon companies like Groupon and Retail Me Not also offer promotions on Sam's Club memberships. Both are running a 50% off membership promotion, at the time of writing.
You can cut out membership fees by shopping online. Shoppers do not need a membership card to shop online, although there are some downsides. Not all items may be available on the Sam's Club website. Also, the company charges a 10% guest fee for online orders placed by shoppers without a membership. Additionally, guest shoppers can't select in-store pickup without a membership.
Employees Criticize The Chain's Attendance Point System
Not all employees claim to feel respected by Sam's Club. As of December 2023, all it takes is three sick days in six months to face termination from the retailer, a standard that is quite stringent, considering the recent pandemic and the unexpected nature of life. This has led to some dismal reviews from employees on Glassdoor, a website that allows employees to anonymously review companies.
While reviews are mostly positive, negative reviews call the attendance point system flawed and archaic. "The culture of the company is run by threat/scare tactics with their point system," reads one negative 2022 Glassdoor review. "The point system is awful. They don't care if you need a personal day, or your kids are sick, or you're sick. If you have the flu and have to be out for 5 days, then you have to use your protected pto, if you don't have any then you have to come to work sick or take points for each day you're out and potentially could get fired," says a different Glassdoor review, posted in February 2023.
Unplanned or unapproved absences (referred to as calling out) even for emergencies, accrue penalty points that stay on an employee's record for six months. Employees may be able to avoid taking a hit on points with a doctor's note, or by transferring earned paid time off, but these options are not always desirable or accessible.
Shoppers Have Experienced Customer Service Issues
And it's not just employees leaving unsavory reviews. Sam's Club carries a roughly one-star average customer review (out of five) on the Better Business Bureau website, which provides information and reviews about businesses. Common complaints were about incomplete order deliveries, cancellations for auto-renewal of memberships not going through, and packages arriving broken or damaged.
Many complaints came from customers who said they were charged for auto-renewal of their membership after they thought they had canceled. One November 2023 complaint alleged that Sam's Club would not cancel her deceased husband's renewal without the death certificate and membership card. "I had the death certificate but could not to this day ever locate his membership card. They said they would not cancel it without the Sam's Club Membership Card," the complaint said.
Other shoppers noted that customer service representatives seemed reluctant to provide help. One December 2023 complaint on the website reads: "The representative was blatantly rude from the beginning of the call to the end. He kept cutting me off as I was trying to explain my concerns; he seemed to be agitated that he had to take my call because he was behaving as if I called him on his personal line."
However, overall Sam's Club is fairly responsive. Several complaints are marked as resolved on the company's Better Business Bureau profile, despite the aforementioned issues, which are understandably annoying to customers.
Sam's Club Was Caught In A Counterfeit Goods Dispute
Deals on designer goods at the warehouse retailer may be too good to be true. In 2006, the luxury fashion label Fendi sued Walmart for counterfeit purses and wallets for sale at Sam's Club. Fendi filed the suit in the U.S. District Court in Manhattan.
The brands came to a confidential settlement agreement, with Walmart agreeing to pay Fendi an undisclosed amount. Sam's Club offered full refunds for products with the Fendi logo. It then removed all such items from store shelves. However, the store does still carry some luxury items, such as designer perfume.
Fendi isn't the only high-power fashion house to sue Sam's Club. In November 2023, Gucci America filed lawsuits against retailers, including Sam's Club, for allegedly carrying counterfeit goods. Sam's Club identified its retail suppliers as Pinnacle and ASL. The lawsuit is still open at the time of writing.
The Company Made Critical Errors In Its Gasoline Sales
A Hermantown, Minnesota Sam's Club location sold watered-down fuel. While unintentional, it was a mistake that led to damage to vehicles and landed the company on the Minnesota Department of Commerce's radar.
The Department of Commerce found water in the underground gas tanks. Water contamination in petrol can be both hazardous and costly. The mixture can cause engine failure and fires. The incident left some drivers with stalled vehicles and a few thousand dollars worth of damages.
This isn't the retail giant's only gas debacle. In April 2023, a Sam's Club in Arkansas put fuel in the incorrect tanks. The use of diesel fuel in a gasoline tank can clog the fuel filter and render the engine inoperable. Conversely, putting gasoline in a diesel tank can be even more destructive and cause damage to the injection system averaging $10,000. One unsuspecting SUV owner wound up with $6,000 worth of damage to his vehicle after the incident.
Read the original article on Daily Meal.