There's a major change to Costco's membership that members might not like


Consumers need to remember that companies have to protect their bottom line

Costco is, shall we say… evolving. The warehouse club that makes changes from time to time made several rules changes over the past few months, but one recent one has some of its customers up in arms when the retailer put a lid on account sharing.

Let’s be honest. Password sharing and account sharing is dishonest. But, after consumers found out they could pull a fast one on Netflix and Disney+ and save themselves some money, many consumers started expanding their “sharing” horizons in other places, like Costco, where they could help a friend avoid the company’s annual membership fee.

But, just like Netflix and Disney+ put the lid on the practice, Costco is taking steps to crack down on anyone trying to do the same.

Costco has its reasons

Let’s not forget that Costco is in business to make money, Members pay $60 a year for a Gold membership, or $120 for an Executive membership, which includes 2% cash back up to $1,000. As a result, membership holders, as well as family members living in the same household, have access to the chain's warehouses. It’s a win-win.

And the win-win continues because a “guest” can tag along with you to the store to take part in the experience. If your friend sees something and would like to buy it, you’ll have to make the purchase and then settle up with them later. Costco doesn’t mind you doing that.

Even nonmembers were allowed to eat at the food court until recently and have all those $1.50 hot dogs and drink combos they could scarf down. That look-the-other-way policy wasn’t promoted, but Costco didn’t put membership screeners on the floor to keep people from doing it, either. 

Things are changing, however

Last year, Costco decided it’s had enough and started requiring customers to show their ID and membership card in the checkout line. Now, the chain has installed scanners at a number of locations, so when a customer strolls into a store, their cards are checked against their photos that Costco has in its system. That food court freedom for non-members is gone, too. 

Former Costco Chief Financial Officer Richard Galanti told CNN this is a pilot test to see if these scanners help the situation. The scanners also allow employees to relax the need for customers to show their membership cards during checkout.

“It speeds up the process at entry and speeds up the process at the checkout,” he said. “That’s what we believe and we’re going to pilot it.” In a statement released to the press, Costco added that it was shooting for “an improved member experience.”

The reviews are mixed, but

Not everyone is happy about this move, and Costco may have to improve the bedside manners of some of its employees in monitoring the situation. But Costco’s not one to shoot itself in the foot. 

Guarding against consumers who "borrow" a friend’s membership may actually work in its favor toward growing its customer base. OIt did for Netflix.

When the streaming king curbed password sharing, it actually experienced very strong growth, signing up nearly 22 million new customers. 

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