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Sam’s Club Takes Advantage of Costco’s Disastrous Credit Card Swap

General Views Of Chain Stores Ahead Of Sales FiguresGeneral Views Of Chain Stores Ahead Of Sales Figures

After Costco (COST) decided to dump its partnership with American Express (AXP) for Visa (V), its’ rival Sam’s Club has sensed a chance for opportunity.

Since the switch, many of the warehouse’s customers have found themselves with an unusable credit card when they’ve made trips to Costco. In response, the Wal-Mart (WMT) owned company announced that it will accept Costco membership cards as a free Sam’s Club Card through July 4.



Fortune previously reported that Costco’s switch to Visa was a play to attract new customers, as Sam’s Club has made recent efforts to steal customers away. For example, in the e-commerce war between the two, Sam’s Club widened its lead over rival Costco by offering store pick-up and self checkout.

This came after the company told Fortune it was making major changes to its business model, since Sam’s Club has only reported better annual same-store sales growth than Costco once since 2007, among other reasons.


One of the ways Sam’s Club is changes its business model is by putting a much bigger focus on improving store food brands. Food generates more than half of Sam’s Club $58 billion in annual sales, but the warehouse club usually caters to people who live in lower income areas, compared to Costco, whose customers usually live in higher-income areas. In order to compete, it’s opening new Sam’s Club locations in higher income zip codes. Regional buyers will also have more say in what the company sells, especially when it comes to gourmet and natural foods.

“This is absolutely a reset for our business,” Sam’s Club Chief Executive Officer Rosalind Brewer told Fortune. “We realized that we have the ability to take Sam’s to a higher household income.”