Costco Plans to Make It Harder to Freeload on Other People’s Membership
Retail giant Costco (Nasdaq: COST) is rolling out new measures to prevent non-members from using borrowed membership cards. The company plans to install membership scanning devices at store entrances, requiring all shoppers to scan their physical or digital membership cards before entering.
This move expands on a system Costco tested earlier this year, which placed scanning machines near store entrances. The new policy aims to catch non-members before they even reach the checkout line, potentially avoiding awkward confrontations.
For members whose cards lack a photo, Costco advises bringing a valid photo ID. However, the company encourages these members to visit the membership counter to have their photo taken and added to their card.
Additionally, Costco is tightening rules around guest access. Valid cardholders must now accompany their guests, making it more challenging for non-members to enter stores using borrowed cards.
These changes follow previous efforts to curb unauthorized shopping. Last year, Costco began requiring both membership cards and photo IDs for self-checkout use.
The company defends these actions, stating, “We don’t feel it’s right that nonmembers receive the same benefits and pricing as our members.” More realistically, membership fees are a crucial revenue source for Costco, generating $4.6 billion in 2023, an 8% increase from the previous year.
Costco also recently announced a $5 increase in membership fees, set to take effect on September 1. The fee hike, the first since 2017, will raise the annual cost to $65 in the US and Canada.
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