How Costco Makes Money On Giving Out Free Samples

Free samples are a massive part of the Costco shopping experience. Much like the treasure-hunt organization of the warehouse, the samples are an endless surprise every time you walk into the store. From obviously delicious ones, like crackers and cheese, to a bit more puzzling ones, like water, the free samples are a chance to try something without having to pay for it; the easiest way to get us all hyped. If you've ever gone back for seconds (or thirds, or more) and felt a twinge of guilt, we're here to tell you there's no need — Costco is actually making good money on the free samples because they encourage impulse buying.

The psychology of free samples affects how we shop to such a degree that stores can spend up to $2 billion on the samples per year. When shoppers see a certain product is available for free, it can awaken a desire for it that wasn't there before. If you weren't thinking about tortilla chips before, you'll definitely be thinking about them after you eat the free sample, and into the shopping cart they go. It's not just the specific sampled product that you're more inclined to buy, either — you're more likely to purchase something from that product category, even if it's a different brand. Your sampling works out for Costco one way or the other.

The interest in Costco's samples is so massive that some shoppers actually dislike them, while many others admit they love shopping at the wholesaler specifically because of the samples. But in order to shop there, you need an annual membership. Those happen to be Costco's biggest driver of profit, as the store made $4.5 billion in 2023 from memberships alone. While the samples might not be the sole reason why people renew their membership each year, they certainly play a part in retaining customer loyalty.

Another aspect of the free samples are the people in charge of them. Because somebody is physically handing you the sample, this element of human interaction can induce a silent pressure to buy the promoted product. The promoters are encouraged by management to give out multiple samples, no matter how many times you come back for seconds. They're supposed to be selling you the product and are sometimes even closely watched by the manager. All of this creates an environment in which it's harder for the customer to say no, especially when you're encountering the samples in different parts of the store in a single shopping trip.

In terms of numbers, Costco has yet to reveal exactly how much the free samples have boosted its sales, but data from other stores shows the samples can increase the sales as much as 2,000% — an astronomical increase well worth our extra sampling, no doubt.