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1 month ago
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Costco is moving full steam ahead with its plans to automatically scan customer's cards at the door to weed out people who are sharing their membership with others.
The wholesale retailer recently announced that scanning devices will be placed in all warehouses over the coming months.
Card scanning machines have been spotted at a number of California locations, KTLA reported, specifically in Huntington Beach and Inglewood.
Locations in New York, Florida, and Pennsylvania said they will soon begin verifying members this way, but did not specify an exact date. One location in Texas will likely start next month.
Guests who want to shop will now need to be accompanied by a member, ending the ability for parents to send their kids on a Costco run while they stay home.
Pictured is the setup at the entrance of the Costco warehouse in Issaquah, Washington, that enables a store employee to view the photo associated with a membership card
Costco is also requiring customers show a photo ID alongside their membership card.
'Additionally, if your membership card does not have a photo, please be prepared to show your valid photo ID. We encourage you to stop by the membership counter to have a photo taken to have on your card,' according to the statement from Costco.
Previously, customers walking into their local Costco weren't necessarily stopped by an employee to check if they were a member.
But last year, executives at the company told workers that it was time to spot check various shoppers.
'We don’t feel it’s right that non-members receive the same benefits and pricing as our members,' the company told Business Insider in June 2023.
'As we already asked for the membership card at checkout, we are now asking to see their membership card with their photo at our self-service checkout registers.'
With its new gambit to verify whether customers are indeed members, Costco appears to be taking a page out of Netflix's book. The streaming service cracked down on password sharing, which led to huge revenue boosts and subscriber growth
The reason for Costco getting tough on membership verification is simple; restricting access helped boost profits to $1.68 billion in the third quarter ending in May 2024, a 29 percent increase from the year before
Costco first rolled out the card scanning regime in Washington state, near the company's headquarters.
The reason for doing this is simple; restricting access helped boost profits to $1.68 billion in the third quarter ending in May 2024, a 29 percent increase from the year before.
Ron Vachris, who became CEO on January 1, told investors in May that the idea to scan members' cards at the door has made Costco stores even more efficient.
'They're speeding up our registers significantly when we get all the scanning and memberships are verified at the front door,' he said during an earnings call.
Costco parking lots are famously crowded, a phenomenon exacerbated by many stores having their own gas stations. And Vachris said he thinks the new plan will help with that.
Pictured: A jam-packed parking lot at a Costco store in Richmond, California
Long lines for gas sometimes compound the issue of maneuverability in Costco parking lots
Partially automating the process of customer verification also 'turns over parking spaces much quicker' and could allow for 'gas expansions where those are needed as well,' Vachris added.
Hundreds of people took to Reddit last year to complain about the parking lots at their local Costcos, with many describing them as 'a Mad Max situation' even at the best of times.
'Costco does a lot of things right, parking lots aren’t one of them,' one person wrote.
Despite raking in nearly $58 billion in revenue for the third quarter, Costco announced in July it would increase the membership fee by September.
It is the first increase since June 2017, and will go up by $5 a year for the standard membership - taking it from $60 to $65 annually.
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