Costco cracks down on members sharing cards at checkout

(NEW YORK) — Costco Wholesale is cracking down on customers sharing membership cards at the self-service checkout.

The big box retailer will require shoppers at the self-checkout kiosks show their membership cards with their photo before they can begin scanning after the company noticed non-members were borrowing the non-transferrable cards to get in the warehouse.

“Those Costco memberships equal revenue and profits for Costco, the retailer. So when that membership gets shared, Costco ends up losing money and losing profits,” Hitha Herzog, chief research officer at H Squared Research, told GMA.

“Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses,” the company wrote in a statement. “We don’t feel it’s right that non-members receive the same benefits and pricing as our members.”

The policy is not new for Costco, where employees regularly scan a membership card at traditional checkout. The company is reinforcing the policy as more self-checkout lanes have opened up across the country.

Over 69 million households have an annual Costco membership, the least expensive of which is priced at $60 a year and lets you add on one extra person who lives at the same address.

“Costco is able to give members deep discounts on products because they know based on their purchasing profile what they are going to buy weekly or monthly,” Herzog continued. “It becomes a numbers game, and those numbers get completely skewed because there are multiple people using that membership.”

Costco’s competitor big box stores, BJ’s and Sam’s Club, have their own non-transferrable membership policies.

Costco isn’t the only major business to get stricter about membership sharing of late: Streaming giant Netflix has limited account sharing to use in one household only, shutting down the service for people attempting to use the account at different locations.

Customers made their feelings heard when Netflix first announced the changes, but they spent money on new subscriptions that hit a record high in the first days after the announcement — higher than they did in the early onset of the pandemic. Netflix stock jumped 15%.

ABC News’ chief business and technology correspondent Rebecca Jarvis says we don’t know if Costco or other companies cracking down will see the same boom.