Just like Netflix and other companies that offer subscription services, in an effort to curb the sharing of membership cards, Costco is testing new technology that could be used as another way to verify whether a shopper is a member or not.
A Costco representative confirmed that the company is testing the new technology at certain locations. However, the company did not disclose whether the new membership verification method will be expanded nationwide and when that might happen.
Currently, shoppers need to show their membership cards to store employees when entering the store and at the checkout when paying.
Costco announced in June that it was cracking down on unauthorized use of membership cards, instructing employees to check cards at self-checkout lines, where most unauthorized card sharing occurs.
“We don’t think it’s right for non-members to receive the same benefits and prices as our members,” the company said in a statement. “Since we already ask for the card at checkout, we will now also ask for the card at our self-service checkouts.”
The crackdown is also seen as a way to increase the company’s revenue as consumers cut back on spending due to rising inflation.
Cost of Membership
Costco offers Gold Star and business memberships for $60 and Executive memberships, which include 2% cashback on purchases, for $120 annually.
Experts say that only members who spend more than $3,000 a year benefit from the 2% cashback. Any spending below that will not generate enough cashback to cover the $120 membership fee.
Memberships include a card for the primary member and an “additional card for a designated member of the same household.”
Source: Axios and CNBC