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Sam’s Club Wants Customers to Skip the Line

Sam's Club is letting customers check out via app in some locations. Image source: Wal-Mart.

Wal-Mart's (NYSE: WMT) Sam's Club wants to eliminate one of the major pain points when it comes to shopping in warehouse clubs.

The company has begun testing the ability for people to check out using their mobile phone at its Sam's Club stores, Consumerist reported. Currently, the warehouse chain offers the phone-based checkout at one location and it will add it in a second one when it opens later this month.

Brad Arnd, who manages the Longmont, Colorado, location which was the first to offer the new technology, addressed it in remarks in a press release when the store opened in June.

"We're excited to open our doors and show our commitment to this community through the local products we carry and organizations we support," he said. "We are also looking forward to our members discovering the convenience of our new Scan & Go shopping app and our enhanced Club Pickup ordering service."

The company explained in the release that the mobile app speeds up the checkout process as it lets consumers scan UPC codes as they load their cart. "When they are done shopping and ready to check out, they can pay directly on their phone from anywhere in the club and bypass the checkout line," Sam's Club wrote.

Why is this a big deal?

Checkout can be difficult at warehouse clubs because many shoppers buy large volumes and that can lead to long lines. That reality can also discourage someone from stopping into a Sam's to buy an item or two simply because it's not worth the effort.

In the case of warehouse clubs, mobile checkout is even more viable because the store already matches customer's receipts to what they have in their cart as they leave. So for Sam's this offering might lead to more sales and it takes work away from employees while also improving the experience of those in line.

It's another shot at Costco

Offering checkout via app also lets Sam's take another shot at Costco (NASDAQ: COST). That warehouse club has been dealing with issues due to its transition from accepting American Express as its only credit card to now taking Visa.

That has led to longer lines, customer confusion, and some dissatisfaction with the usually well-liked chain. Sam's has worked aggressively to take advantage of that, offering free entry to its clubs to Costco members while pushing the idea that it takes a wide array of credit cards.

Will this work?

Ultimately the piece of this offering that tweaks Costco probably won't be a difference maker, but offering faster checkout options will. It seems unlikely that someone shopping for a large family, a summer camp, or any other big order would use the technology, but people making more modest purchases will appreciate it.

Scan & Go will take people out of lines, which will make checkout a faster experience for people who do not use the app. It will also make it much easier to pop into a Sam's to grab something, which could open up a whole new kind of shopper for the chain.

This is still the early days, but if Sam's rolls this out nationally, it may have a big winner on its hands.

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Daniel Kline has no position in any stocks mentioned. He has left a warehouse club due to the line more than once. The Motley Fool owns shares of and recommends Costco Wholesale and Visa. The Motley Fool recommends American Express. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.