Costco Wholesale is introducing a new system to ensure only valid members gain entry to its warehouses. Traditionally, customers have shown their membership cards to an employee at the entrance, but Costco has observed a growing trend of non-members using someone else's card to shop. To address this issue, the retail giant will be rolling out membership scanning devices at the entrance of its stores in the coming months.
The new system requires all members to scan their physical or digital membership cards using a barcode or QR code before entering. This move is designed to tighten entry controls and ensure that only legitimate members enjoy the benefits of shopping at Costco. "Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse. Once deployed, prior to entering, all members must scan their physical or digital membership card by placing the barcode or QR Code against the scanner," Costco stated online.
An attendant will be stationed at the entrance to assist customers with any issues or questions about the new system. If a membership is inactive or expired, or if a customer wants to sign up for a new membership, the attendant will direct them to the membership counter before they can shop. Additionally, members whose cards lack a photo will be asked to show a valid photo ID and can have their photo added to their card at the membership counter.
This initiative follows Costco's recent testing of scanners at select locations to ensure members match their cards. The company aims to streamline the entry process and enhance security, making it more difficult for non-members to exploit the system. "It helps speed up the process," said Richard Galanti, Costco's former chief financial officer, in a statement to Axios. "When you go through checkout, particularly self-checkout, there's not someone there having to review the card again."
The introduction of membership scanners is part of Costco's broader strategy to maintain the integrity of its membership model, which is a cornerstone of its business. This move also comes as Costco prepares to increase membership fees for the first time in seven years. Starting September 1, the cost of Gold Star and business memberships will rise from $60 to $65, while annual fees for executive memberships, which include a 2% reward on purchases, will increase from $120 to $130.
Despite the fee hike, Costco aims to preserve its reputation for value. The company last raised rates in June 2017 and has kept fees steady despite inflation. To soften the impact of the increase, Costco is also boosting the 2% reward maximum for executive members from $1,000 to $1,250.
Costco's decision to implement membership scanners and raise fees reflects its commitment to maintaining a high level of service and value for its members. The new scanning system not only prevents card sharing but also speeds up the entry process and reduces the need for additional checks at checkout, enhancing the overall shopping experience.
This move is reminiscent of similar actions taken by other companies to curb freeloading. For instance, Netflix recently cracked down on password sharing to ensure that only paying subscribers can access its content. By implementing these measures, Costco hopes to convert non-paying visitors into loyal, paying members.
