Costco, the popular membership warehouse club, is taking action to crack down on non-members who try to gain access using borrowed membership cards. The company has noticed an increase in this practice, especially since the introduction of self-checkout systems. In an effort to tackle this issue, Costco is implementing new policies at their self-checkout registers.
Customers will now be required to present their membership cards along with a photo ID when using the self-checkout option. This is a similar procedure to what is already in place at regular checkout lanes. Additionally, the company is testing a new system where members will have to scan their membership cards at the store entrance instead of just showing them to employees.
The main goal of these measures is to prevent non-members from enjoying the same benefits and pricing as Costco members. With more people sharing memberships since the pandemic, Costco’s finance chief has identified the need for stricter enforcement.
Aside from addressing security concerns, Costco believes that the new scanners at the store entrance will expedite the entry and checkout process, enhancing the overall customer experience.
The membership model is integral to Costco’s business, and any changes to membership growth or renewal rates could significantly impact the company’s profitability and pricing. In 2022, Costco boasted approximately 66 million paid members and 119 million cardholders, cementing its position as one of the largest membership clubs globally. In the same year, the retailer generated $4.2 billion in membership fees, marking a 9% increase from the previous year, and maintained an impressive renewal rate of 93%.
By implementing these new policies and testing the use of scanners at the entrance, Costco aims to safeguard the exclusivity of their membership benefits and ensure that only legitimate members can access their offerings. As the company continues to innovate and adapt, these measures will be crucial in maintaining their continued success.
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