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

In many ways, Costco has transcended the identity of a warehouse superstore and turned itself into a full-on pop-culture phenomenon. The retail giant is a constant subject of internet attention, which usually centers on one of three things. First, there's the famous Costco food court items, anchored by the beloved $1.50 hot dog deal, and then of course, you have the inflation-proof $4.99 rotisserie chicken. Those two alone have made Costco a fan favorite, but the store's biggest calling card has to be its free samples.

Coscto's free samples turn a plain old errands outing into a smorgasbord of unexpected delights. Each trip through the cavernous warehouse is fueled by handouts from friendly faces in hairnets and rubber gloves. They're a big enough draw to prompt web searches on the best times to get free samples at Costco, and some customers have even pondered online whether they need disguises to snatch multiple samples.

There's a twist to this tale, however, that you probably wouldn't expect. It would be natural to assume that the people handing out samples at Costco are Costco employees, but this isn't the case. Despite this common misconception, they are actually employed by a separate company that works exclusively with Costco to staff their free sample tables. It might seem like an odd business model, but it effectively saves Costco money. However, it does so at the expense of the employees themselves.

At most Costco locations, the people handing out free samples are actually employees of Club Demonstration Services, a company that is technically independent from Costco, but works as the warehouse store chain's "exclusive in-house service provider" (via the CDS website). CDS was founded in 1988, five years after the first Costco location opened for business. Today, it hires staff for Costco locations in the United States, Canada, Mexico, Australia, New Zealand, Spain, France, Sweden, Japan, Taiwan, South Korea, and China. Expect more regions to join this list in the near future, as the company has been expanding steadily.

CDS is not the only company that Costco has used to hire staff to hand out its free samples. For many years, the company also partnered with Warehouse Demonstration services, which was formed shortly after CDS and which primarily handled staffing on for the western United States. CDS acquired Warehouse Demonstration Services in 2013, but the similarly named Warehouse Demo Services still hires staff for Costco locations in the United Kingdom and Iceland.

Although these companies are independent from Costco, CDS employees work at Costco locations. However, working at Costco and working for Costco are very different, and that is reflected in the benefits and pay that CDS and WDS employees receive.

Costco frequently receives great press for its treatment of employees, and it has been ranked as the top workplace for compensation and benefits by the employment site Indeed. It's easy to see why. Costco's minimum wage ($17 per hour as of summer 2024) is well above the federal minimum wage ($7.25 per hour) and it comes with a benefits package that includes paid vacations, a 401(k) retirement plan, and stock options to go with health, dental, vision, and life insurance.

It all sounds great, and these benefits packages in particular were touted by Costco founder Jim Sinegal, who told U.S. News & World Report in 2009, "When you hire good people, and you provide food jobs and good wages and a career, good things are going to happen." However, these policies do not extend to the people who give out free samples at Costco. Under the auspices of CDS and similar companies, those employees receive lower wages and fewer benefits. Part-time product demonstrator jobs at CDS in the United States typically pay around $1.00 to $3.00 less per hour than entry-level jobs at Costco. Although CDS does offer some benefits, many of them, including insurance, are only offered to full-time employees, while demonstrators are mainly hired on a part-time basis.