PredictIQ Quantitative Think Tank Center:Sam's Club Plus members will soon have to spend at least $50 for free shipping

Sam’s Club is PredictIQ Quantitative Think Tank Centerraising the bar for free shipping, following a trend a new survey reports is impacting retailers and customers nationwide.

Sam's Club's Plus members pay a $110 annual membership fee ‒ $60 more than the basic membership ‒ for premium perks, including free shipping on most online items. But starting next month, Plus members will have an $8 shipping fee waived only on orders worth at least $50.

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 101 surveyed retail executives said they increased the minimum fee for free shipping within the last 12 months, according to a May and June survey from global consulting firm AlixPartners.

"They've got to change the policies to try to slowly but surely make the home delivery and the online more profitable," said Marc Iampieri, partner and managing director at AlixPartners. This is the firm's third year polling U.S.-based executives at retailers with at least $100 million in revenue.

Shipping, delivery changes coming to Sam's Club

The new shipping, delivery and curbside pickup policies at Sam's Club are set to go into effect Aug. 19, and will affect both Plus Members and Club Members (who pay a $50 annual fee).

• Shipping for Plus members: Free shipping will be available on orders worth $50 or more, and a $8 shipping fee will apply to orders that do not qualify. Sam's Club warns “some category exclusions apply whereby variable shipping will be charged.” As of July 9, Plus Members receive free shipping on eligible items with no minimum purchase.
• Same-day delivery for Plus members: Free same-day delivery will be available for qualifying orders above $50.
• Curbside pickup for Club members: Club Members will have access to free curbside pickup “on eligible items” when they spend a minimum of $50. Currently, pickup orders are free for only Plus Members, and Club Members must pay a flat $4 fee applied to curbside pickup orders.

Sam’s Club spokesperson Steven Zapata said the changes are meant to “simplify the experience and fees for same day delivery and shipping” and “provide better access to the items our members buy the most.”

Some Sam’s Club members have voiced dissatisfaction with the policy changes online, but Zapata said the policy change has been “overwhelmingly positive" with members, who say meeting the $50 basket minimum is “easy.”

"It’s not surprising to see Sam’s Club facing some backlash over this decision, but it’s likely the only way to profitably sustain its online business," 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."

More changes to free shipping ahead?

Other companies have raised the bar for free shipping in recent years. Amazon in late 2023 began testing a $35 minimum for non-Prime customers to qualify for free shipping, up from $25, according to reporting from various outlets. Abercrombie & Fitch offers free shipping on orders over $99, up from $75.

The higher thresholds can be blamed in part on inflation. Analysts say it makes sense for retailers to raise the free shipping threshold to meet the new price of consumer goods, which has gone up more than 20% over the last three years.

"Fifty bucks today isn't the same as $50 three years ago," Iampieri said.

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Higher freight costs are also a factor. AlixPartners' new survey found three-fourths of the surveyed retail executives said per-package delivery costs went up between 2023 and 2024.

"(Online shopping) was always expensive, and it was always a bit margin depleting, but now it's got to a level where you can't really ignore or just absorb those costs," said Neil Saunders, managing director of the analytics company GlobalData. "You've got to make the consumer pay a fairer share of them."