Costco has given a clue as to how it will crack down on customers sharing membership cards.
Staff at a warehouse in Washington – near its HQ – have started scanning shoppers’ cards before they enter.
That pulls up a photo of the cardholder on a screen, which the worker at the entrance can compare with the person standing in front of them.
Normally shoppers simply flash their card at that employee, who may or may not choose to scrutinize the small photo printed on it.
The new system is thought to be a trial ahead of a potential broader rollout.
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
An image posted to Reddit this week showed a Costco employee at the entrance to the warehouse in Issaquah, Washington, next to a sign that read: ‘You will be asked to scan your membership card before entering the warehouse.’
The Issaquah location is close to Costco’s Washington State headquarters and a warehouse where the company routinely trials different schemes, one local member claimed on Reddit.
Costco executives have in the past suggested the company is gearing up to crack down on membership card sharing, which can deal a significant blow to its revenue.
Costco charges either $60 or $120 annually for either basic or executive membership but is widely expected to raise fees soon. Official policy is that anyone with a card can bring two guests with them on each visit.
In any given year those fees generally make up more than half of its profits. It uses them to offset expenses and sell products at lower prices.
In June, Costco employees around the country started checking membership cards in the self-checkout lanes as it caught wind that cards were being shared.
‘Since expanding our self-service checkout, we’ve noticed that nonmember shoppers have been using membership cards that do not belong to them,’ its CFO Richard Galanti wrote in a statement at the time.
Costco membership fees usually account for more than half of the company’s profits
Costco charges either $60 or $120 annually for basic and executive membership
‘We don’t feel it’s right that nonmembers receive the same benefits and pricing as our members,’ it read.
Galanti later told the Wall Street Journal that although only a small fraction of members attempt to share cards, Costco’s sheer size means it can still cost them significantly.
‘It’s a really small percent of members who are doing it,’ he said.
‘But when you’re dealing with millions of transactions, even a very small percentage is something you would want to correct.’
Nonetheless, the crackdown made headlines at the time and Galanti sought to temper some of the hysteria, saying: ‘I think the story is bigger than the issue.’