Costco Tightens Membership Rules with Mandatory Card Scanning

Costco is set to implement a new policy requiring all customers to scan their membership cards upon entering its stores. This measure, announced on the retailer's website, aims to ensure that only valid members access the benefits and pricing offered by the warehouse club.

Under the new system, shoppers will need to scan the bar code or QR code associated with their membership cards at store entrances. Costco employees will be stationed at the entrances to assist customers with the new scanners. Members whose cards lack photos will be required to present a valid photo ID.

This policy change comes as Costco seeks to address an increase in non-members shopping with borrowed cards, particularly after expanding self-checkout options. In June 2023, the company stated, "We don't feel it's right that non-members receive the same benefits and pricing as our members."

The introduction of mandatory card scanning follows earlier efforts to curb membership sharing. Last year, Costco increased staff presence in self-checkout areas and began enforcing membership verification at all checkout registers. The company also started strictly enforcing its longstanding policy of limiting the famous $1.50 hot-dog-and-soda deal to members only earlier this year.

"We don't feel it's right that non-members receive the same benefits and pricing as our members."

Customer reactions to the new policy have been mixed. Some shoppers have expressed concerns on social media about potential longer lines at store entrances as people adapt to the new scanners. Others view the measure as redundant, given that memberships are already verified at checkout.

The membership policy tightening coincides with Costco's announcement of a fee increase, the first in seven years. Starting September 1, 2024, annual membership prices will rise by $5 for Gold Star, Business, and Business add-on members, and $10 for Executive members.

Costco's membership model has proven highly successful. As of the end of 2023, the company boasted approximately 71 million membership accounts and 128 million cardholders. In 2023, membership fees generated $4.6 billion in revenue, an 8% increase from the previous year.

It's worth noting that Costco's success extends beyond its membership model. Founded in 1983, the company has become known for its "treasure hunt" shopping experience and its Kirkland Signature brand, introduced in 1995. Costco is also the world's largest retailer of choice and prime beef and one of the largest pizza and rotisserie chicken retailers in the US.

The company's commitment to value is evident in its pricing strategy, with product markups typically not exceeding 15%. This approach, combined with a famously liberal return policy and early adoption of organic food offerings, has contributed to Costco's strong customer loyalty and low employee turnover rate compared to industry averages.

As Costco implements these new measures, it continues to balance member exclusivity with its reputation for value and customer service. The effectiveness of the new scanning policy in curbing membership sharing and its impact on customer satisfaction remain to be seen.