Costco’s controversial crackdown on membership is aggressively rolling out to more stores

Costco is continuing with its plans to automatically scan customers’ cards at the entrance, in a bid to identify people who share their membership with others.

The wholesaler has recently announced that scanning equipment will be installed in all warehouses in the coming months.

Card scanning machines have been spotted at a number of locations in California, KTLA reported, particularly in Huntington Beach and Inglewood.

Locations in New York, Florida and Pennsylvania said they would begin verifying members this way soon, but did not provide an exact date. One location in Texas is expected to start next month.

Guests who want to shop will now have to be accompanied by a member, meaning parents can no longer send their children to Costco while they stay home.

Costco also asks customers to show a photo ID in addition to their membership card.

“Additionally, if your membership card does not have a photo, please be prepared to show your valid photo ID. We encourage you to stop by the membership desk to have a photo taken for your card,” Costco’s statement read.

In the past, customers at their local Costco wouldn’t necessarily be approached by an employee to check if they were a member.

But last year, company executives told employees it was time to conduct random checks on several customers.

“We don’t think it’s fair that non-members get the same benefits and prices as our members,” the company told Business Insider in June 2023.

‘Because we already asked for the membership card at checkout, we now ask you to show the membership card with photo at our self-scan checkouts.’

With its new move to verify that customers are actually members, Costco appears to be taking a page from Netflix’s book. The streaming service has been stricter about password sharing, leading to huge growth in revenue and subscribers

The reason Costco is getting stricter about verifying memberships is simple: Limiting access helped boost profits to $1.68 billion in the third quarter ended May 2024, up 29 percent from the year before.

Costco first introduced the card scanning system in Washington state, near the company’s headquarters.

The reason for this is simple: by restricting access, profits in the third quarter ending May 2024 rose to $1.68 billion, up 29 percent from the previous year.

Ron Vachris, who became CEO on Jan. 1, told investors in May that the idea of ​​scanning membership cards at the door has made Costco stores even more efficient.

“Our checkouts are processed significantly faster when all scans are done and memberships are verified at the front door,” he said during a call about revenue.

Costco parking lots are notoriously crowded, a phenomenon exacerbated by the fact that many stores have their own gas stations. And Vachris said he thinks the new plan will help with that.

Pictured: A crowded parking lot at a Costco store in Richmond, California

Long lines for gas sometimes exacerbate the problem of maneuverability in Costco parking lots

In addition, by partially automating the customer verification process, parking spaces are released “much faster” and “more gas can be supplied where necessary,” Vachris said.

Last year, hundreds of people complained on Reddit about the parking lots at their local Costcos, with many describing the parking lots as “a Mad Max situation,” even in the best of times.

“Costco does a lot of things right, but parking isn’t one of them,” one person wrote.

Despite reporting nearly $58 billion in third-quarter revenue, Costco announced in July that it would raise membership fees starting in September.

It’s the first increase since June 2017. The standard membership will increase by $5 per year, from $60 to $65 per year.