Jan 18, 2024 - Business

Costco crackdown of membership sharing reaches next level

Costco membership options on a wall at a club

Costco Wholesale is testing the use of scanners at some club entrances. Photo: Joe Raedle/Getty Images

Costco is taking its crackdown on membership sharing to the next level with a trial at some locations that requires members to scan their cards when entering stores.

Why it matters: It's the latest effort to convert freeloaders into paying members, similar to Netflix's password-sharing shakedown.

What's happening: Costco is testing the scanners at the entrances of three clubs to ensure members are matched to their cards, Richard Galanti, the wholesale club's chief financial officer, told Axios.

  • The Costco clubs testing the scanners are in Issaquah, Washington, near the company's headquarters; Sterling, Virginia; and West Plano, Texas, Galanti confirmed.
  • Costco is already using scanners in its U.K. warehouses, Galanti said.
  • "It helps speed up the process," Galanti said. "When you go through checkout, particularly self-checkout, there's not someone there having to review the card again."

Yes, but: The tests aren't a change in Costco's current policy since clubs ask members to see cards when entering a club (usually a glance from a distance) and scan them at checkout.

Context: In June, Costco started asking shoppers to see membership cards at self-service checkout registers at clubs nationwide after noticing "non-member shoppers have been using membership cards that do not belong to them."

  • Galanti told Axios this change has made a difference.
  • "It's still a very small percentage, but when you have, you know, a few million transactions a day it adds up," Galanti said. "Many of the people are choosing to sign up there for their own membership."

Costco membership cost 2024

Details: Costco offers Gold Star and business memberships for $60 and Executive memberships, which include 2% back on purchases, for $120.

  • Memberships include a card for a primary member and an "additional card for one designated member of their household."

Between the lines: The wholesale club has held membership fees steady since its last increase in June 2017 but in the past has raised fees around every five years.

  • Galanti said in December during an earnings call that "it's a question of when, not if" the membership fees will go up.

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