Costco made waves a year ago when it announced that only its members would be allowed to buy gas from its stations, reversing a longtime policy based on a misinterpretation of a New Jersey law. Now, the company is going after non-members borrowing members’ cards to be able to shop at its stores.
In a move to tackle membership abuse, retail giant Costco has announced a crackdown on its membership rules, citing an increase in card sharing since the expansion of self-checkout services across its stores. The company says it has begun conducting spot checks at self-checkout counters in an effort to identify and eliminate non-members.
Costco, known for its annual membership program, requires each of its nearly 70 million shoppers to present their ID cards upon entering the store and during checkout. The ID cards feature an image of the cardholder, allowing for verification of membership. While basic membership permits the cardholder to bring one additional person from the same address into the store, the company has noticed instances of non-members benefiting from these privileges.
“Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses,” stated a Costco representative. “We don’t feel it’s right that non-members receive the same benefits and pricing as our members.”
The business model of Costco heavily relies on membership fees, which cover the company’s operational costs and enable the offering of competitively low prices to its members. By identifying and addressing membership abuse, Costco aims to ensure that its loyal members receive the full value of their membership, while protecting the integrity of its business model.