Dominick Reuter/Business Insider
- Costco appears to be testing a digital ID scanning station at the front door of at least one of its stores.
- Shoppers spotted the tech at the store near Costco's corporate headquarters in Issaquah, Washington.
- Small tweaks — like more thorough ID checks — can have a large financial impact for the company.
Costco's membership sharing crackdown appears to be growing.
On Sunday, shoppers spotted a digital ID scanning station at the front door of a Costco warehouse near the company's corporate headquarters in Issaquah, Washington.
Shoppers on Reddit said rather than flashing their ID (with its postage stamp-sized picture) as they normally would to the employee staffing the entrance, they were instructed to scan their card at the station, displaying a large version of their member photo on the tablet.
Business Insider confirmed the location with the Reddit user who took a photo of the setup.
Costco employees in California and Texas told Business Insider their locations did not have the tech in place, but the Issaquah location is generally known to be where the company tests out new concepts before rolling them out more broadly.
u/mike753951 via Reddit, used with permission
Business Insider saw scanners that appeared to be the same in use at a UK warehouse last year. On Reddit, several international customers said they were surprised that US locations do not typically scan member IDs at the entrance.
The company did not immediately respond to Business Insider's request for comment.
Last June, Costco began assigning employees to manually check member IDs in the self-checkout lanes after it said it noticed an increase in shoppers using cards that don't belong to them.
Tightening the enforcement of its membership policy likely helped the company increase revenue without having to hike the annual fee, which has held steady at $60 for a basic membership since 2017.
CFO Richard Galanti told the Wall Street Journal last year that only "a really small percent of members" improperly share their ID cards with non-members, "but when you're dealing with millions of transactions, even a very small percentage is something you would want to correct."
Small tweaks — like more thorough ID checks at the front door — can have a large impact.
Costco added 2.1 million paid memberships last year, ending with 72 million at the end of the most recent quarter, and the company pulled in nearly $4.6 billion in 2023 membership fees.
Membership fees are increasingly important to Costco's bottom line, with fee revenue representing nearly three-quarters of Costco's net income of $6.3 billion last fiscal year.
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