Costco has taken measures to bolster its financial performance by intensifying its adherence to membership regulations. Although the company clarified that it would not alter existing membership rules, it pledged to tighten the enforcement of these regulations.
Presently, approximately 69 million households hold annual memberships with Costco. The basic membership allows the primary cardholder to bring along one additional individual residing at the same address for shopping at the store.
According to retail analyst Hitha Herzog, "These Costco memberships generate revenue and profits for the company. When memberships are shared, Costco incurs financial losses."
Costco mandates that shoppers present their ID cards both upon entering the store and during checkout. These cards display a photograph of the primary cardholder. However, certain customers managed to borrow someone else's membership card and exploit the self-checkout system without detection.
To discourage non-members from using these tactics, Costco has initiated random checks at the self-checkout counters.
The retail giant issued a statement addressing the issue, stating, "Costco is able to maintain competitive prices by utilizing membership fees to offset operational costs... We find it unfair that non-members receive the same privileges and pricing as our members."
Costco's recent efforts to reinforce membership regulations align with a broader trend among membership-based companies. Netflix notably cracked down on password sharing among individuals living at different addresses.