Costco Cracks Down on Membership Card Sharing

Costco is testing a new system that will require members to scan their cards before entering the stores.

Interior view of a Costco store on August 18, 2020 in Teterboro, New Jersey.
(Image credit: Getty Images)

Costco recently began testing a new system at select stores that requires shoppers to scan their membership cards before entering the stores, in a move aimed at cracking down on card-sharing.

Rather than showing your card to a warehouse employee so you can shop, you'll run into testing card scanners at select locations, a Costco spokesperson told Kiplinger in an email. 

“This test is to match members to their cards at the door prior to shopping for an improved member experience,” the spokesperson added. 

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The stores testing scanners are located in Issaquah, Washington; Sterling, Virginia; and West Plano, Texas, according to a January 18 Axios report. The scanners are already being used at U.K. warehouses, this report added.

According to the report, Costco made the move after seeing an uptick in non-members entering stores with cards that do not belong to them and checking out at self-checkout kiosks. Costco said that the scanners speed up the checkout process.

The move follows similar moves by Netflix and Disney, each of which began to crack down on password-sharing last year.

Membership prices could increase soon

On Costco’s latest quarterly earnings call, Chief Financial Officer Richard Galanti responded to a question about whether the company had near-term plans for a membership price hike by saying it was “a question of when, not if.”

Costco has two levels of membership: Gold Star, which cost $60 annually; and Executive, which will run you $120 annually.

Of gold bars, healthcare and hot dogs

In the last year, Costco has expanded its offerings in various sectors. For example, as of early last year, you can buy gold bars at Costco. In September, Costco partnered with healthcare marketplace Sesame to offer outpatient healthcare services starting at $29.

More recently, Costco Auto Program announced a limited-time deal to provide a $1,000 discount for the purchase or lease of selected new models of Cadillac vehicles.

Meanwhile, the price of the company's famous hot dog and soda combo has remained at $1.50 since its introduction in 1984.

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Joey Solitro

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.