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new york
CNN
—
Bad news if you’re trying to terminate someone else’s Costco membership. Retail giant Costco is stepping up its crackdown.
When you enter a Costco, you must present your membership card to the store clerk to make your purchase. Costco membership cards are not transferable, but the company does allow members to give one of their other girlfriends in the home her second household card. The company stipulates that anyone with a card can bring up to two guests to the club during a single visit.
But Costco has noticed that non-members are sneaking in membership cards that don’t belong to them, especially since Costco expanded its self-checkout system.
Costco recently began asking shoppers to show their membership card along with a photo ID at self-checkout lines in an effort to crack down on customers. This is the same policy as regular checkout lanes. “We do not believe it is right for non-members to receive the same benefits and prices as members,” Costco said in announcing the changes.
And now Costco is testing a system that would require members to scan their membership cards at the store entrance, rather than flashing their cards to employees. A shopper spotted the new scanner at a store in Washington state and posted a photo on Reddit.
Richard Galanti, Costco’s finance director, told CNN that more people have been sharing memberships since the 2020 pandemic.
Costco is testing the scanners at several stores to see if they can help. The scanner also eliminates the need for employees to ask customers to present their membership card at the register or self-checkout.
“It speeds up the process at entry and the process at checkout,” he said. “That’s what we believe and we’re going to pilot it.”
This is the latest example of companies like Costco and Netflix cracking down on membership sharing.
Costco has approximately 66 million paying members and 119 million cardholders as of 2022, making it one of the world’s largest membership clubs. Costco members pay $60 a year for a regular membership and $120 for an “executive” card that includes additional benefits.
The membership model has been critical to Costco’s business, which has boomed during the pandemic. Annual fees increase the company’s profits and help offset expenses, helping to keep Costco’s prices down. Any increase in membership or changes in renewal rates could hurt Costco and force it to raise prices.
The company earned $4.2 billion in dues in 2022, an increase of 9% from 2021, and a high renewal rate of 93%.
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