iStock.com/slobo
August 8, 2024
Will Scanning Cards To Enter Costco Annoy Members?
In another attempt to crack down on membership sharing and nonmember walk-ins, Costco will soon require shoppers to scan their membership cards before entering, according to an update on the warehouse club’s website.
Historically, members entered by flashing their cards at employees.
The online note states, “Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse. Once deployed, prior to entering, all members must scan their physical or digital membership card by placing the barcode or QR Code against the scanner.”
Members are encouraged to stop by the membership counter to have a photo taken and added to their card if their card doesn’t have one. If not, they’ll be asked to show a valid photo ID upon entering.
The note also included a reminder that any guest shopper must be accompanied by a valid member for entry. An attendant will still be available at the entrance to address any questions or concerns.
Last summer, Costco began asking shoppers using self-checkout registers for their membership cards along with a photo ID — the same policy as regular checkout lanes — after finding nonmembers sneaking in to use membership cards that don’t belong to them.
“We don’t feel it’s right that nonmembers receive the same benefits and pricing as our members,” Costco said in a statement.
Some social media critics of the card checks at self-checkout noted that they were making purchases for their elderly parents. Some felt harassed by Costco’s staff asking for their cards. One angry Redditor wrote, “I get WHY they are doing it, but they need better training because these employees are treating people like we’re all there to shoplift.”
Richard Galanti, Costco’s recently retired CFO, told The Wall Street Journal at the time that only a “really small percent” of members are sharing cards, “but when you’re dealing with millions of transactions, even a very small percentage is something you would want to correct.”
Galanti later told CNN that entrance scanners would mean associates wouldn’t have to ask customers for their membership cards at either regular checkout registers or self-checkout.
“It speeds up the process at entry and speeds up the process at the checkout,” Galanti said.
Costco earlier in the year also cracked down on nonmembers using its food court.
Costco relies on membership fees to drive most of its profits and help keep product prices low. Membership fees accounted for $4.6 billion, or 73% of Costco’s total profit in 2023, according to CBS News.
In mid-July, Costco announced plans to raise annual membership fees in North America in its first increase since 2017.
Discussion Questions
Does having customers scan membership cards upon entry solve Costco’s challenges with membership sharing or create unnecessary hassles for members?
Do you anticipate long lines or other issues with scanned entry?
Does it improve the checkout process?
Poll
Loading …BrainTrust
Cathy Hotka
Principal, Cathy Hotka & Associates
Arnjah Dillard
North America Retail Practice Lead, Stibo Systems
Mohammad Ahsen
Co-Founder, Customer Maps
Recent Discussions
More Discussions
How Can Retailers Crack the Gen Z ‘Riddle’?
Gen Z is becoming an increasingly important consumer demographic, but an elusive one to map. How…Does Bath & Body Works’ Scented Holiday Campaign Pass the Sniff Test?
Bath & Body Works is kicking off a new campaign with scent being at the fore…Which Tech Will Solve In-Store Inventory Woes?
Three major tech lineups are looking to solve retail inventory problems. Which is most suited?
Members usually have to show cards at the entrance anyway, so I don’t see that scanning them is any great annoyance. And this process creates other time savings by not having to show cards at registers. The only people who will be potentially frustrated by this are those who share memberships. And the not unreasonable message being sent by Costco to them is: get your own membership!
Great points Neil. Scanning your card at entrance is similar to what we do for other memberships, such as fitness centers, where the company wants to validate that we are the “real” member.
Hopefully this new initiative will instead expedite the checkout process and improve overall satisfaction. Loyal Costco members are likely to appreciate the assurance that only valid members can shop. This seems similar to Netflix’s crackdown on membership sharing, which led to a rise in membership. Time will tell, but seems like a solid move.
Cracking down on sharing subscription benefits, be it digitally or physically, is a trend in entertainment and retail, and the act itself of scanning the card at entrance shouldn’t create any significant frustration. A decent percentage of shoppers will be happy to do it to help reduce the unfair practice of sharing cards. The biggest obstacle I see is what happens when there is an issue with the scan, and now the associate who is still standing at the entrance has to deal with a potential issue, be it a technology issue or an issue with someone saying they are valid members, and now you have a queue starting to form at the entrance. That would be impactful to customer service as no one wants to wait to get in a discount warehouse club. But overall, I think this is a smart move.
Any change in behavior can be met with resistance, and no doubt Costco management considered how members will feel about this new change. However, it is entirely Costco’s decision to create and enforce their policies. Obviously, Costco team members should be conducting their work in a way that is respectful and member-friendly, but some shoppers will be offended no matter how nicely they are engaged by store personnel. Scanning tickets for concerts, sporting events and airports, is all part of how the world moves today. I doubt that the scanning will significantly reduce customer flow, but if it does, there’s an easy solution: add more staff and scanners. There will be a much bigger backlash if Costco ever raises the price on their $1.50 hot dog.
Agree 100%, including the backlash of that kosher dog pricing.
I believe this move is a step in the right direction for Costco. Ensuring that only paying members can access the warehouse not only protects the value of the membership but also maintains fairness for all members. While there might be some initial hiccups, like potential delays or confusion at the entrance, these are challenges that can be addressed with proper planning and support.
However, it’s crucial to consider that when technical issues arise, whether it’s at the entrance or the register, the impact on the customer experience is the same. Having a solid secondary plan in place for when things go awry at the doors will be essential to keep things running smoothly. Overall, while there might be some adjustments needed, this change has the potential to enhance the shopping experience by making the process more efficient and secure for all members.
This seems like an example of trying to make “perfect the enemy of good”: will some people dislike it? Certainly…some people will dislike everything. As for verification at checkout: is this question serious? You show your ticket when you get on board or when you enter a show…not after it’s over.
I suspect customers will still be required to scan their membership cards at checkout so there is an electronic relationship between the customer and the order for future reference (returns, recalls, etc.) and for Costco’s Customer 360 view for targeted marketing and personalization.
My only question is at the entrance, how backed up will it get for customers to each scan their card and be verified. This has to be more than just a “valid membership” check if they are trying to cut down on membership sharing. This could be the point of annoyance since today you can almost not break stride going in as you show your card to the associate at the door.
Time will tell but I do understand Costco’s desire to tighten up the membership validation process since it is such a big part of their profit.
In view of the fact that 70 percent of Costco’s revenue is generated through memberships, it is understandable that management might be excessively concerned with cards and identification. The issue of membership sharing is a major concern for Costco.
If it were easy for non-members to use the membership cards of others, Costco could see a significant drop in membership sales. This would directly impact their revenue, as a large portion comes from membership fees. Additionally, it could lead to increased operational costs in managing and controlling unauthorized access.
Customers should not expect Costco stores to be passive or complacent with regard to membership sharing. The rules should be strictly enforced, and I am confident that Costco customers will abide by them. If non-customers wish to shop at Costco, they will need to become members.
Costco will need to implement stricter identification checks at the entrance and checkout points. They could also employ advanced technology such as facial recognition or digital membership cards that are harder to share. Additionally, increased staff training on spotting and addressing potential membership violations could further bolster their efforts.
Families tend to shop for one another, for example, young adults shopping for their elderly parents, but even then, each household must be a member, including the household being shopped for.
Clear communication about these new policies to customers is crucial to ensure smooth implementation and avoid confusion. Costco should use multiple channels, such as emails, in-store signage, and social media, to inform members about the stricter identification checks and the importance of adhering to the rules.
By doing so, customers will be more likely to understand and comply with the new measures, ultimately supporting Costco’s efforts to maintain its revenue and operational efficiency. It is really as simple as that.
It is harder to restrict non-members from shopping online. Online shopping is a bit more complex. Different topic, different day. Db
A year from now now one will remember the old way. With the majority, and in some years, all of their profit being equal to the membership fees it is important to protect the fees. Additionally, when done right it is another very visible reminder of the value they are providing their members with. Greeting the customer with this reminder on the way in can lead to additional confidence that the member is getting a great deal as they walk in the door.
Scanning your membership card at the entrance makes more sense than waving it in front of the associate standing at the door. Hopefully this will eliminate having to show your card again before checking out. The second associate card check always makes me feel like they don’t think I belong there.
Completely agree that the current process of waving the card to enter then having to present the card for photo verification at purchase is off putting. Scan once is an improvement over today’s practice. And it opens up the door to additional shopper information for Costco.
Right! It just doesn’t feel good at the check out.
Costco members should welcome this policy. It’s reasonable, and it ensures that Costco’s business model remains intact. Might pharmacies in high-shoplifting areas want to adopt a similar policy?
Scanning membership cards at Costco isn’t a hassle; it’s a common practice seen at airlines, gyms, and community centers. This simple step ensures fairness, security, and smooth operations, just like boarding a plane or accessing gym facilities.
While there might be minor delays as members adjust, once familiar, scanned entry will streamline the process. Like with airline check-ins or gym access, any initial hiccups typically smooth out, leading to faster and more efficient entry.
Additionally, scanned entry improves the checkout process by eliminating the need for membership verification at the registers. With membership confirmed at the entrance, both regular and self-checkouts become quicker, ensuring a smoother shopping experience overall
Simple answer: No. Have you been to Costco recently. I was there last weekend. Store was packed, people were generally happy, checkout was quite efficient, and no shortage of interesting and good value merchandise. Customers will continue to come, even if scanning membership cards at entry.
That’s right. There is an enviable relationship between Costco and its customers.
Confirming membership at the entrance is better as long as it can be done efficiently and quickly. Just like they typically have two associates checking receipts at the exit during peak times, they will likely require two associates checking membership at the entrance when it’s busy. Again, we’ll put up with some inconvenience as long as we get our $1.50 hot dogs!
Scanning is hardly a new idea. What took them so long? It should be considerably more efficient, and I can’t imagine it will be a hassle for the shoppers.
I have have my card electronically stored in my iPhone for 2-3 years. There is a Costco app with the member’s photograph (which they take) and a QR code that indicates that I am not an alien ad below there. Scan and go!
This is a fair policy and should improve the overall shopping experience since they plan to eliminate the 2nd card check at checkout. Now, one further step to enhance the experience would be to eliminate the receipt review at exit. This would be a logical step and go a long way to galvanize the trust between store and shopper.
While it makes sense, it will create friction at the entry. If you’ve visited at peak times, and imagine all of those people now having to scan their card, it will take longer to get in. And, how about when the machines go down? From a business standpoint, it may be needed. From a customer perspective, it may just be perceived as a hassle.
I don’t foresee any pushback on this decision. Costco members have paid their membership dues and know that they are being protected. This is not the same as changing the price of the $1.50 hotdog, which did meet with resistance and was rolled back. Checkout will go faster, scamming will be reduced or eliminated. Providing one’s membership ID at Costco is probably more of a badge of honor than an imposition. I have to show my tickets to get into the concert…
I don’t shop at Costco because I didn’t think that I could get past the screener at the front door. Yes, I’m an obsessive rule follower, an annoyance to the rest of my family. I seriously doubt that this will have much of an impact on Costco’s business or get their membership riled up. On the contrary, I think if I were a member and I realized that this initiative ensures that people aren’t taking advantage of something that I pay for, I’d be pleased.
I have stopped shopping at Costco and let my membership expire due to the rudeness and hostility of the workers at the doors. Prison Guards are more courteous,
This is a positive improvement that is overdue. The only question is why did it take so long??
This is much ado about nothing. It represents an opportunity for marginal profit improvement. For customers, there is a potential time saving on the backend, only needing to produce your payment card. Asking customers to scan their card upon entry requires little to no compromise by the customer.
Perfectly reasonable for Costco to require card scanning. Most private clubs require the same thing. As others have said, rather than leave shoppers with a lingering annoyance as they leave, it makes more sense to do it at the entrance since you’re showing your card anyways.
For those who already have cards and paid up their membership fees, there will be a bit of schadenfreude as those who have gotten away with it in the past are now turned away. A bit like those who have paid for premium seats on a flight and see somebody who has snuck in get caught!