MINNEAPOLIS - Sara Traver of Chaska, Minn., is a fan of wholesale clubs, but she didn't include them when she shopped for window replacements for one reason:
Costco and Sam's Club sell home improvement products and home remodeling services, from countertops and cabinets (Costco) to patio doors and bathtub refinishing (Sam's). But many members don't seem to know that.
No aisle in the massive warehouse stores is devoted to carpet or countertops. Instead, the service displays hide in plain sight near the exits. And the displays are rarely staffed, so if club customers are interested, they need to pick up a brochure and call a toll-free number.
That's not enough of a lure for Traver. "I need more of a direct appeal," she said.
She's not alone. So few of Consumer Reports' subscribers shop the clubs for remodeling projects that the magazine, which has reviewed both Costco and Sam's Club, hasn't evaluated the home services offerings, said senior editor Tod Marks.
Sandy Torrey, assistant vice president of Costco services, described the program as successful but wouldn't elaborate.
How are home products and services sold through the clubs? And, more important, are they good deals?
How it works
Neither Costco nor Sam's Club is in the business of remodeling and neither sells those products and services directly. They work with local contractors who are affiliated with national brands (such as EcoWater, Lennox and Mohawk). Those contractors advertise through in-store displays. In return, Costco and Sam's Club charge the contractors a percentage of the completed jobs sold via the stores, Torrey said.
The contractors don't sell directly at the warehouse stores but make free home visits to club members.
What's the discount?
Several contractors that sell through Costco and Sam's said they offer no special discounts for members. Golden Valley Heating and Air Conditioning, Marsh Heating and Lindus Construction, which installs Englert LeafGuard gutters, said that their prices are about the same whether they're sold through a warehouse club or an independent bid.
"Sometimes Costco is about 10 percent cheaper," said Gordy Foizie, project manager at Marsh Heating and Air Conditioning. But because customers who buy from the club are not eligible for a manufacturer's rebate currently available, "that makes it a wash," he said.
However, some products include a gift card worth several hundred dollars as part of the total package. And Costco members can save an extra 2 percent if they have an Executive membership. While that may not sound like much, it can add up to several hundred dollars or more on big-ticket purchases.
Although Costco has a stellar reputation for quality, consumers shouldn't assume that the workmanship is above average. The fan site AddictedtoCostco.com asked users if they'd tried Costco home services and products. Of the 33 comments, as many respondents (nine) expressed disappointment as expressed satisfaction.
Factors to consider
• Services: Because services can vary by location and season, check the stores. Sam's Club currently offers services on windows, patio doors and bathtub resurfacing. Costco offers hooded gutters, cabinets, countertops, garage doors, carpet, heating and air conditioning and water softening.
• Selection: All of the contractors start with a free home visit. For some products, such as carpet, that limits the selection to a fraction of what buyers would find in a showroom.
• Vetting: Wholesale clubs select specific manufacturers and contractors to do business with. Still, members should investigate the company before agreeing to have work done. Ask for references and check with consumer organizations such as Angie's List at Angieslist.com or the Better Business Bureau at its tucson.bbb.org/ site.
• Guarantees: Be sure to check who is responsible for service and warranties. (Typically, it's the contractor or the manufacturer, not the warehouse club.) Buying through Costco or Sam's can offer an extra level of protection, however. If problems arise after you've hired a contractor, members can ask Costco to intervene on their behalf, Torrey said.