Costco Implements Stricter Policy To Prevent Membership Card Sharing At Self-Checkout

(RTTNews) - Costco Wholesale, the popular big box retailer, is taking measures to crack down on customers who share their membership cards at self-service checkout counters.

In a bid to preserve revenue and profitability, Costco will now require shoppers to present their membership cards with a corresponding photo before they can begin scanning items at the self-checkout kiosks. This decision comes as Costco observed instances of non-members borrowing non-transferrable cards to gain entry into the warehouse.

According to Hitha Herzog, Chief Research Officer at H Squared Research, shared memberships result in financial losses for Costco. "Those Costco memberships equal revenue and profits for Costco, the retailer. So when that membership gets shared, Costco ends up losing money and losing profits," Herzog explained.

Costco's statement emphasizes the role of membership fees in offsetting operational expenses and maintaining affordable prices. "Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses," the company stated. "We don't feel it's right that non-members receive the same benefits and pricing as our members."

While the policy is not new for Costco, as traditional checkout lanes already require card scanning, it is being reinforced due to the increasing availability of self-checkout options nationwide.

Costco boasts over 69 million households with annual memberships, starting at $60 per year, allowing the addition of one extra person residing at the same address. Hitha Herzog highlights the significance of individual purchasing profiles in enabling Costco to offer deep discounts. She explains that shared memberships distort the numbers and hinder accurate predictions based on members' shopping patterns.

Rival big box stores BJ's and Sam's Club have also implemented their non-transferable membership policies, aligning with Costco's approach.

Costco's actions align with a broader trend of companies cracking down on membership sharing. Streaming giant Netflix, for example, recently restricted account sharing to a single household, preventing users from accessing the service at different locations. Although customers expressed initial dissatisfaction, Netflix witnessed a surge in new subscriptions following the announcement, leading to a record-high stock increase of 15%.

It remains to be seen whether Costco and other companies implementing stricter membership policies will experience similar positive effects. The impact of these measures on customer behavior and company performance will be closely monitored.