The success of Costco’s business model hinges on rigor. Members-only wholesalers strictly monitor entry and exit and double-check customer receipts.
But for friends and relatives of members, the famous hack for getting low Costco prices without paying an annual fee was self-checkout lanes. Some users have noticed that they can borrow a Member’s Her card or Member’s Her QR code from the Costco app to bypass the usual checkout her-lane ID requirements.
That workaround is nearing its end. The company said in an emailed statement Wednesday that it had noticed non-member shoppers using someone else’s membership card, which is non-transferable according to Costco’s policy, in the self-checkout lanes.
“Currently, self-service checkouts require a photo membership card,” the company said, adding, “If the membership card does not have a photo, we will ask for a photo ID.”
Costco is loved by consumers for its $1.50 hot dog and soda combos, towering rows of inexpensive bulk goods, and signature Kirkland brand products ranging from linens to liquor. The regular membership fee is $60 per year and the Executive Card fee is $120 per year.
Katie Thomas, head of management consulting firm Kearney Consumer Institute, said borrowing a friend’s Costco card or QR code for an occasional shopper was “not an unreasonable hack,” adding that the new paid membership is a no-brainer. He added that they could be connected. Thomas, who was a member himself, said he was recently scolded for using his mother’s membership card at Costco.
“Membership fees help offset operating costs, and because membership fees and their composition are important to us, we were able to keep prices as low as possible,” Costco said in a statement.
Neil Saunders, managing director of retail consultancy GlobalData, said the retail market was tight, and said the crackdown at Costco was due to increased pressure on corporate margins, wholesalers’ merchandise and labor costs. It was speculated that the cost of various expenses would increase.
“We probably would have turned a blind eye while growth continued and everything looked rosy,” he said, but said tougher economic conditions are becoming tougher.
Costco faced supply restrictions and labor shortages amid pandemic, reports say good performance The annual report also boasted new products for 2022, including “barbecue pellets, women’s jeans, improved dog food, sauté pans, fresh mini cakes, and chicken fried noodles.”
The company also reported that it had around 119 million cardholders last year. Revenue from these dues will total $4.2 billion in 2022, up 9% from 2021. Costco reported net income of $5.8 billion last year, up from $5 billion in 2021, the company reported.
“You can see the importance of the membership model,” Sanders said.
According to the company, the membership renewal rate in 2022 will be about 90% worldwide. Costco hasn’t raised membership fees since 2017, but executives at a recent earnings call suggested it could go up.
Thomas pointed out obvious similarities to Netflix. Netflix said last month that it would begin suspending users who used someone else’s account elsewhere for more than 30 days, blaming the crackdown on changing and increasing economic power. competition.
“I don’t think it’s right for non-members to receive the same benefits and prices as members,” Costco said Wednesday..“
