The Insane Economics Behind Costco's Free Samples

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There's a good reason why Costco puts out free samples. The Atlantic finds that free samples are incredibly effective in leading people to make actual purchases, and that in some cases, samples have boosted sales by as much as 2,000%.

The free samples at Costco have become emblematic, and "can convince people that its stores are fun places to be," according to the The Atlantic. But they really drive sales, too. Giovanni DeMeo, who helps handle Costco's samples, told the magazine: "When we compare it to other in-store mediums … in-store product demonstration has the highest [sales] lift."

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It seems when you accept a free cup of salsa and tortilla chips, human nature predisposes you to want to make a purchase. "Reciprocity is a very, very strong instinct. If somebody does something for you... you really feel a rather surprisingly strong obligation to do something back for them," said behavioral economist Dan Ariely.

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Not everyone feels the tug of reciprocity for free samples, of course. The Atlantic recounts the tale of Erwin Lingitz, a Minnesota man who "was arrested in a Supervalu grocery store after spending an excessive amount of time at the deli counter. In the words of a Supervalu spokesperson, Lingitz had violated 'societal norms and common customer understanding regarding free-sample practices.' While the charges were later dropped, the evidence remains incriminating: After a search, Lingitz was found to have stored in his pockets about a dozen soy sauce packets and "1.46 pounds of summer sausage and beef stick samples."
· The Psychology Behind Costco's Free Samples [The Atlantic]
· Here Are the Top 10 Highest-Selling Retailers of 2013 [Racked]
· LA-Area Costco Labels Bible as "Fiction," Uproar Ensues [Racked]