Customer Reactions To Costco’s Membership Crackdown

Raise your hand if you thought Costco was a membership utopia, where for the cost of a middle-tier gym pass, you could drag your non-member friends into a wonderland of oversized carts and even larger savings. Well, think again. Costco is tightening the reins on membership sharing and squeezing a bit more from their loyal customer base. Here’s what you need to know.

Automated Scanning Devices

Costco is set to implement automatic card scanning at store entrances across all locations. No more sneaking in under your friend’s membership. Those days are gone.

“Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse” – Costco

Why the change? According to CEO Ron Vachris, these measures are designed to speed up the checkout process and help with parking space turnover and gas station expansion.

“They’re speeding up our registers significantly when we get all the scanning and memberships are verified at the front door” – Ron Vachris, CEO of Costco

Membership Verification Steps

From here on out, guests need to be accompanied by a valid member to enter the store. If your card doesn’t have a photo, be prepared to show a valid photo ID or update your card at the membership counter.

“Additionally, if your membership card does not have a photo, please be prepared to show your valid photo ID. We encourage you to stop by the membership counter to have a photo taken to have on your card” – Costco statement

Self-checkout stations are also joining the party by requiring both a membership card and a photo ID for purchases. This adds another layer to Costco’s robust customer verification system, aimed at maximizing efficiency.

Rising Membership Prices

To add fuel to the fire, starting September 1, Costco will be raising its membership fees by $5—bringing the cost to $65 annually in the US and Canada. This is the first increase since 2017.

Such moves align Costco with the broader trend of subscription services cracking down on account sharing and attempting to extract more revenue from their customer base. Just look at Netflix, which saw substantial profit gains after clamping down on password sharing.

Customer Reactions

The customer reactions are as varied as you’d expect. Some members applaud the decision for ensuring that only paying members receive benefits. Others view these changes as another squeeze on the consumer, lamenting the end of an era where you could easily bring a non-member friend along for a shopping spree.

Notably, Costco reported that its profit soared to $1.68 billion in the third quarter ending May 2024—a 29% increase year-over-year. This suggests that despite the crackdown, the company’s financial health is robust.

Balancing Efficiency and Customer Satisfaction

It’s a classic tug-of-war between efficiency and customer satisfaction. While these changes may expedite checkout lines and improve parking turnover, they also reflect the tightening economic pressures consumers face due to rising costs and restrictive policies.

So, whether you’re a long-time member or a recent joiner, these new rules are bound to affect your Costco experience. How you feel about these changes likely depends on your perspective on the value of exclusive membership benefits. One thing is for sure: Costco isn’t just a bulk retailer but also a master of its membership domain.