The Big Misconception You Shouldn't Believe About Costco's Free Samples

Who really hands out Costco's free samples

At most Costco stores, the individuals distributing free samples are actually employees of Club Demonstration Services (CDS), a company that operates independently from Costco but serves as the warehouse chain's "exclusive in-house service provider," according to the CDS website. Founded in 1988, five years after Costco's first store opened, CDS now employs staff for Costco locations across the United States, Canada, Mexico, Australia, New Zealand, Spain, France, Sweden, Japan, Taiwan, South Korea, and China. The company has been steadily expanding, so more regions are likely to be added soon.

CDS is not the only organization Costco has utilized for staffing its sample distribution. For many years, Costco also collaborated with Warehouse Demonstration Services, which was established shortly after CDS and primarily managed staffing in the western United States. In 2013, CDS acquired Warehouse Demonstration Services, but the similarly named Warehouse Demo Services continues to provide staff for Costco locations in the United Kingdom and Iceland.

While these companies operate independently from Costco, CDS employees work at Costco locations. However, there is a significant difference between being employed at Costco and being employed by Costco, which is evident in the benefits and compensation that CDS and WDS employees receive.

How Costco saves money with its sample staff

Costco often garners positive attention for its employee treatment and has been recognized by the job site Indeed as the leading workplace for compensation and benefits. This acclaim is well-deserved. As of summer 2024, Costco's minimum wage stands at $17 per hour, significantly higher than the federal minimum wage of $7.25 per hour. Additionally, the company offers a comprehensive benefits package that includes paid time off, a 401(k) retirement plan, stock options, and health, dental, vision, and life insurance.

These offerings are impressive, and Costco's founder, Jim Sinegal, emphasized their importance in a 2009 interview with U.S. News & World Report, stating, "When you hire good people, and you provide good jobs and good wages and a career, good things are going to happen." However, these favorable policies do not apply to the employees who distribute free samples at Costco. Working under companies like CDS, these workers earn lower wages and receive fewer benefits. Part-time product demonstrators at CDS in the U.S. typically earn about $1.00 to $3.00 less per hour than entry-level positions at Costco. While CDS does provide some benefits, many, including insurance, are reserved for full-time employees, leaving part-time demonstrators with limited options.