Sam’s Club Merchant Services Review

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Date Established

1983

Location

Bentonville, Arkansas

Pros

• Offers full line of Clover products
• EMV-compatible mobile card reader

Cons

• Primarily offers tiered pricing plans
• Standard four-year contract
• Undisclosed early termination fee
• Poor reputation for sales transparency
• Poor customer service

Overview

Sam’s Club Merchant Services is a merchant account provider headquartered in Bentonville, Arkansas. As you might expect from the name, it’s a division of Sam’s Club, the chain of membership-only retail warehouse clubs owned by Walmart. While Sam’s Club has been in business since 1983, the merchant services division has only been operating since the early 2000s. Much like its rival Costco (which operates the very similar Costco Merchant Services), Sam’s Club tries to use the reputation of its retail division for low prices as a lure to entice business owners into signing up for an account under the belief that they’ll save money over more traditional merchant account providers. Just like Costco Merchant Services, however, Sam’s Club Merchant Services is merely a reseller for mammoth processor First Data, the largest processor in the United States. They’ve provided services to over 50,000 merchants since inception.

First Data has a reputation for high prices and, unfortunately, you won’t get any discount by signing up through Sam’s Club. With a few exceptions (which we’ve highlighted below), Sam’s Club Merchant Services uses the same equipment, pricing, and contract terms as its backend processor. Because they don’t provide any additional features or services beyond what’s available directly from First Data, there’s no reason for us to recommend them over signing up with First Data directly.

The primary difference between Sam’s Club Merchant Services and First Data is that Sam’s Club offers a few pricing disclosures on their website, while First Data does not. Unfortunately, the rate plans disclosed are deceptive tiered pricing plans where you’ll usually pay much higher processing rates than the ones advertised. They also offer a much lower early termination fee than First Data, but since they prominently claim “no early termination fees” on their website, we can’t give them much credit for this policy.

Ultimately, Sam’s Club Merchant Services earns a very average 3 out of 5 stars rating. Their use of the Sam’s Club name to suggest that they’re more affordable than a traditional merchant services provider is very misleading, and we’ve seen a steady flow of complaints from merchants who signed up thinking they would save money, but eventually paid far more than they thought they would. Large, established businesses that can afford the high account fees in exchange for lower interchange-plus pricing are better off signing up with First Data directly and eliminating the middleman. Smaller businesses should steer clear of both Sam’s Club Merchant Services and First Data. Instead, we recommend taking a look at Dharma Merchant Services (see our review), one of our favorite providers. While Dharma uses First Data as one of its backend processors and features many First Data products (including the popular Clover line of equipment), they offer interchange-plus pricing for all merchants, month-to-month billing, and far better transparency on costs. You can also check out our Merchant Account Comparison Chart for an overview of our other top-rated providers.

Products & Services

Virtually all the products and services offered by Sam’s Club Merchant Services are First Data-branded, although their product lineup isn’t quite as extensive as what First Data can offer. Nonetheless, they cover all the basics and can provide everything a retail or eCommerce merchant would need to run their business. These products include the following:

• Merchant accounts: As noted above, Sam’s Club is merely a reseller for First Data, who will actually be underwriting your account and processing your transactions. Unlike many other merchant account providers, however, Sam’s Club openly discloses the relationship with their backend processor on their website.
• Credit card terminals: Sam’s Club offers First Data’s product lineup here, including the First Data FD130, a wireless, EMV-compliant countertop terminal with a color touchscreen. Pricing is not disclosed, but the FD130 normally goes for around $340. We highly recommend that you buy your terminals outright rather than getting stuck in an expensive, long-term terminal lease. Unfortunately, leases are handled by First Data Global Leasing, one of the worst credit card terminal leasing companies in the industry.
• Point-of-sale (POS) systems: Sam’s Club offers First Data’s popular Clover lineup of POS systems, including the Clover Mini, Clover Mobile, and Clover Station models. Again, we recommend buying your equipment outright and avoiding a lease. The company advertises a rental option on its website but doesn’t provide details or pricing information. Unfortunately, Sam’s Club/First Data merchant accounts aren’t compatible with third-party POS systems.
• Mobile processing: The company uses First Data’s Clover Go mobile processing system, which consists of the Clover Go app and the Clover Go card reader. The app is free, and available for both iOS and Android. The Clover Go reader supports magstripe and EMV payment methods, as well as NFC-based methods such as Apple Pay and Google Pay. It connects to your smartphone (or tablet) through Bluetooth, allowing it to work with newer phones that don’t have a headphone jack. Pricing is not disclosed for the reader.
• eCommerce support: Sam’s Club is primarily aimed at the retail sector and doesn’t offer much for eCommerce merchants. They don’t advertise the availability of a payment gateway or virtual terminal. However, they do provide the Clover Online Store, a web-based product that integrates with apps from the Clover Marketplace to allow retailers to make online sales. eCommerce merchants who only sell digital products are pretty much out of luck.
• Security features: Sam’s Club merchant accounts are protected by TransArmor®, a third-party security service that uses both encryption and tokenization to protect your customers’ payment method data and reduce the scope of your PCI compliance requirements.

Fees & Rates

Unlike First Data, which doesn’t disclose any pricing information on its website, Sam’s Club Merchant Services offers two basic pricing plans for merchants to choose from. You can select either Value Rate Pricing or Simplified Pricing, depending on which option is a better fit for your business. Here’s some more information on these two plans:

Value Rate Pricing

This plan is advertised as being best for merchants who want a low cost per transaction rate. Terms of this plan include the following:

• Processing rates starting at 1.29% + $0.15 per transaction
• $5 monthly minimum
• No early termination fees

Sounds pretty good, doesn’t it? Whenever you see the phrase “rates starting at” or “rates as low as,” you should immediately be suspicious. This common sales gimmick is very misleading, and a good indicator that you’ll be enrolled in a tiered pricing plan. Here’s what the fine print has to say about this pricing plan:

Rates are valid for Sam’s Club members only. Rate and authorization fee applies to retail card-present transactions with an average ticket up to $350. American Express transactions priced separately. Some business types are subject to different rates. Rates listed are for qualified transactions only. Rates and eligibility are subject to change without notice. All merchants are required to complete a merchant application and are subject to underwriting and approval. Additional fees may apply. All rates and fees are subject to change in accordance with the terms of the Merchant Agreement. Processing services provided solely by First Data.

Sure enough, that 1.29% rate is for qualified transactions only – a sure sign of a tiered pricing plan that will also include much higher mid-qualified and non-qualified rates. Worse yet, this advertised rate is probably for debit card transactions only, as it’s less than the interchange rate for most Visa and Mastercard credit card transactions. No processor is ever going to charge you less than the interchange rate, as they have to pay that amount to the credit card associations before they can take their cut.

If that’s not bad enough, consider that processing rates also vary according to your monthly processing volume. The lowest rates are reserved for businesses with the highest volumes, so for most merchants, you’ll never see that rate when using your merchant account. Needless to say, we encourage you to take a close look at the qualified, mid-qualified, and non-qualified rates disclosed on your contract, because that’s what you’ll actually be paying. The only good news here is that Sam’s Club does disclose the fact that your expenses will be higher, even if they bury it in fine print that they’re hoping you’ll never read. Some providers using this sales gimmick don’t make any additional rate disclosures on their websites.

Simplified Pricing

This plan is advertised as being best for merchants who want to pay the same rate for all types of cards. It includes the following main features:

• Rates starting at 2.29% + $0.19 per transaction for swiped (i.e., card-present) transactions
• Rate starting at 3.29% + $0.19 per transaction for non-swiped (i.e., card-not-present) transactions
• No early termination fees
• Includes credit/debit transactions and network access and assessment fees

You’ll notice that this plan also includes the “rates starting at” language that indicates a tiered pricing plan. As with the Value Rate Pricing option, there’s also some fine print that you’ll want to review carefully:

Rates are valid for Sam’s Club members only. Rate applies to processing annual processing value between $50,000-$200,000 in MasterCard, Visa, Discover and American Express transactions. Higher flat rate pricing available for businesses processing at a higher volume. Rates and eligibility are subject to change without notice. All merchants are required to complete a merchant application and are subject to underwriting and approval. Additional fees may apply. All rates and fees are subject to change in accordance with the terms of the Merchant Agreement. Processing services provided solely by First Data.

The first thing you’ll notice is that smaller businesses processing less than $50,000 per year can’t sign up for this plan. If your business falls into this category, we recommend using a payment service provider (PSP) like Square. They’ll offer true flat-rate processing rates and won’t add any additional fees just to maintain your account. If, on the other hand, your business processes over $200,000 annually, you’ll certainly want to skip this plan and negotiate an interchange-plus pricing plan that’s customized to your needs.

Besides mentioning that “additional fees may apply,” Sam’s Club doesn’t make any additional disclosures regarding account fees. Besides the need to maintain an annual Sam’s Club membership, there will also be other fees associated with your merchant account. These fees seem to be highly variable, so review your contract documents very carefully so you’ll know in advance what fees you’ll have to pay. For a more in-depth explanation of these fees, see our Complete Guide to Credit Card Processing Rates & Fees.

Contract Length & Early Termination Fee

Sam’s Club Merchant Services uses the same contract as First Data, which usually comes with a standard length of four years. This is a very lengthy initial contract term, as the industry standard is “only” three years. The contract also includes an automatic renewal clause, which will extend the term for successive one-year periods after the initial term is complete.

While the company specifically advertises “no early termination fees” on its website, this apparently only applies if you close your account within the first 90 days of opening it. Beyond that, you’ll pay an early termination fee (ETF) of $90.00. While this is much lower than what other providers usually charge and also lower than the prorated liquidated damages clause in First Data’s standard contracts, it’s still pretty disingenuous considering the company’s advertising claims.

The lengthy contract term and possible early termination fee are reason enough not to recommend Sam’s Club Merchant Services. More and more competing companies are waiving or eliminating their early termination fees and switching to month-to-month billing due to complaints from merchants, and there’s no reason for you to settle for these kinds of terms in today’s market. However, you might be able to negotiate a waiver of the ETF and possibly a shorter contract term. In any event, be sure to review your contract documents thoroughly before signing up. You’ll want to be very clear about how long you’re on the hook for, and also how to terminate your merchant account without being charged an ETF.

Sales & Advertising Transparency

As we’ve noted above, Sam’s Club Merchant Services employs a number of misleading sales gimmicks on its website. Other than that, their site is pretty basic and doesn’t offer much concrete information. Most of the site’s content consists of empty marketing fluff, although some of the links to product brochures for the Clover equipment are fairly informative. While we’d certainly prefer to see some information about interchange-plus pricing, it’s unlikely ever to be included as long as Sam’s Club is trying to set you up with a more expensive tiered pricing plan.

Besides the website, the company also sells accounts through an in-house sales team. We couldn’t find any evidence that they employ independent sales agents. While in-house representatives generally have a much better reputation for honesty and professionalism, we did find quite a few complaints alleging the non-disclosure of important account terms. Our best advice for dealing with Sam’s Club – or any other provider – is simple: never completely trust a sales representative. It’s up to you to read your contract and ask the appropriate questions before you commit to a four-year contract. We see too many complaints from merchants that could have been avoided if the merchant had simply read their contract ahead of time.

Sam’s Club Merchant Services has no presence on social media. While Sam’s Club itself has accounts on all the major social media sites, their merchant division does not. It appears to us that the company is content to use the Sam’s Club name and reputation for low prices to lure in unsuspecting merchants.

Customer Service & Technical Support

Sam’s Club Merchant Services advertises 24/7 telephone support, available 365 days a year. This support appears to be provided by First Data through its Clover division. Live chat is also available from 8:00 AM to 9:30 PM (ET) on Monday – Thursday, 8:00 AM to 7:30 PM (ET) on Friday, and 9:00 AM to 7:30 PM (ET) on weekends. Unfortunately, we’ve seen many complaints alleging rude or incompetent customer service, so be aware that you might be in for a rough experience if you have to deal with something other than a simple technical problem. First Data also has a bad reputation when it comes to customer service, so this is really no surprise.

Unfortunately, self-help options are very limited. The company provides a link to Clover’s knowledgebase, but that’s about it. This site might actually be very useful if you have a technical problem with one of Clover’s products, but obviously won’t help you if you have a more serious issue such as an account freeze or a billing problem.

Negative Reviews & Complaints

Sam’s Club Merchant Services does not have its own BBB profile, which makes assessing complaints difficult. You’ll find over 1000 complaints against First Data on their BBB profile, but only a scattered handful of them are specific to Sam’s Club Merchant Services. Likewise, the Sam’s Club BBB profile is filled almost entirely with complaints about the main company’s wholesale operation. Confusion over the First Data/Sam’s Club Merchant Services relationship has also muddied the waters on Ripoff Report, where we found only three complaints.

Fortunately, we’ve found plenty of other complaints in our own Comments section below and in comments made on other review sites. Taken together, several trends emerge, including the following issues:

• Poor customer service: This was far and away the most common complaint. Merchants noted that customer service representatives were often rude, indifferent, and lacking in knowledge. Experiencing difficulty in even contacting a customer service representative was another common complaint.
• Excessive “hidden” fees: This is another all-too-frequent complaint against traditional merchant services providers like Sam’s Club Merchant Services/First Data. There’s plenty of blame to go around here. Providers leave themselves open to this claim by failing to disclose all their fees on their website, with some even claiming “no hidden fees” as a means to entice merchants into signing up for an account. At the same time, merchants who fail to read their contracts thoroughly before signing up are also at fault. All fees that you will or could be responsible for should be disclosed in your contract documents, even if those disclosures are buried in pages of fine print. Unfortunately, we’ve found very few providers that fully disclose all fees on their websites. Reading your contract ahead of time is the only way to protect yourself from this issue.
• Withheld funds and account terminations: First Data provides every aspect of the merchant services for Sam’s Club clients, and the company has a bad reputation for being quick to withhold funds or freeze an account at the slightest hint of fraud. Your best defense is to learn how to avoid account holds, freezes, and terminations and minimize chargebacks.

Positive Reviews & Testimonials

You’ll find a handful of very brief testimonials from Sam’s Club clients scattered throughout the company’s website. While they appear to be authentic, they’re simply too short to be very convincing. We prefer to see testimonials that clearly identify the merchant and their business, as well as providing contact information. We also like to see the merchant mention specific features or services that were helpful to their business. Unfortunately, we couldn’t locate any positive reviews of Sam’s Club Merchant Services outside of their own website. If you’ve had a positive experience with the company, please leave a review in the Comments section below. Thanks!

Final Verdict

In assessing Sam’s Club Merchant Services, it’s impossible to separate the company from its relationship with First Data. In fact, Sam’s Club Merchant Services seems to function more like a subsidiary of First Data than a division within Sam’s Club itself. The only real connection to its low-cost wholesaler parent company is that you’ll be required to maintain a membership in Sam’s Club as a condition to having a merchant account through Sam’s Club Merchant Services. This requirement essentially adds a $45.00 annual fee to your merchant account and is hard to justify unless you already use Sam’s Club extensively for purchasing supplies for your business. At one time, Sam’s Club Merchant Services offered a free, one-year Sam’s Club membership as a “perk” for signing up for a merchant account, but this offer appears to have been discontinued.

If you’ve read our First Data review, you’ll know that we don’t recommend them for most small or medium-sized businesses due to the high overall costs. Unfortunately, Sam’s Club Merchant Services deliberately markets their services (which are really First Data’s) to small businesses, using the Sam’s Club name to suggest that you’ll obtain merchant services for a far lower overall cost than the industry average. Nothing could be further from the truth. The only potential savings over going with First Data directly is their lower early termination fee – a fee you should never have to pay in the first place. With the same lengthy contracts as First Data and an emphasis on “simplified” tiered pricing plans, it’s likely that you’ll actually pay more than if you had just signed up with First Data directly.

Overall, the company’s use of a four-year standard contract, expensive tiered pricing plans, and numerous undisclosed account fees add up to a potentially very expensive experience for a small business owner. We’ve read numerous complaints from dissatisfied merchants who lost thousands of dollars from doing business with Sam’s Club Merchant Services. Our advice is simple: stay away. If First Data is right for your business, you’re better off signing up with them directly and eliminating the middleman. If they’re not, you’ll have a much more pleasant (and less costly) experience with a highly-rated provider such as Dharma Merchant Services (see our review) or Payment Depot (see our review).

Sam’s Club Merchant Services earns a disappointing 3 out of 5 stars rating due to their high costs, onerous contract terms, poor customer service, and numerous complaints about their sales practices. For some far better alternatives, check out our Merchant Account Comparison Chart.

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Frank Kehl

Frank Kehl is an independent writer, editor, and blogger with an endless fascination for technology and gadgets. After a long and enjoyable career of traveling around the world as an Air Force navigator, he’s comfortably settled down in the wine country of California’s Central Coast. He enjoys reading, photography, hiking, and numerous other outdoor pursuits.

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