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An exterior view of a Costco store on August 18, 2020 in Teterboro, New Jersey.
Kenna Betancourt | Corbis News | Getty Images
Costco Takes a page out of the Netflix book.
The retailer said Tuesday it is cracking down on people who sneak into its clubs and try to shop with other people’s membership cards.
Costco said it has always asked shoppers to have their membership cards at the cash registers when they check out. Now, he’s also required to see photo cards at self-checkout records — and show a photo ID if the shopper’s membership card doesn’t have a photo.
“We do not feel it is right for non-members to receive the same benefits and prices as our members,” the company said in a statement.
The membership-based warehouse club said it has noticed more abuse of card sharing since it expanded self-checkout to more of its stores.
Extensive application has been previously reported before Dallas Morning News.
Costco is distinguished from other retailers by its business model. The bulk of its profits come from membership fees, which help cover the company’s expenses and keep prices low. It charges $60 per year for the annual membership and $120 per year for the higher level plan, called Executive Membership.
Membership-based warehouse clubs have attracted more customers and won more of their wallets over the past three years. Shoppers who turned to clubs to help load up on toilet paper and hand sanitizer during the pandemic are now going there for cheaper gas and bulk food during an inflationary period.
Walmart-The Sam’s Club owned club experienced a similar boom in business. The number of its members has reached a record high.
However, clubs have felt pressure because consumers are held back by inflation, or are spending on experiences such as travel and dining out instead. In the past two quarters, Costco has reported a heavy mix of sales coming in from food items with slowing demand for more expensive goods and popular pandemic categories like furniture and electronics.
Its year-over-year net sales rose about 2% to $52.6 billion, including the impact of inflation During the quarter ended May 7.
“It’s raining down on all of us during these trying times, especially with the bigger tickets and discretionary items,” Richard Gallante, Costco’s chief financial officer, said on a December earnings call.
Shares of Costco are up nearly 16% this year, outpacing the nearly 14% gain for the S&P 500. It closed Monday at $523.42.
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