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Costco cracks down on membership card sharing

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An exterior view of a Costco store on August 18, 2020 in Teterboro, New Jersey.

Kena Betancur | Corbis News | Getty Images

Costco takes a page from Netflix’s book.

The retailer is cracking down on people who sneak into its clubs and try to make purchases using other people’s membership cards, it said on Tuesday.

Costco said it always asked shoppers for membership cards at checkout when they checked out. It also now demands to see photo cards at self-checkout registers — and show photo ID if a shopper’s membership card has no picture.

“We do not believe it is right for non-members to receive the same benefits and prices as our members,” the company said in a statement.

The member warehouse club said it has seen more abuse of card sharing as it has rolled out self-service checkouts to more of its stores.

He previously reported on enhanced enforcement Dallas morning news.

Costco differentiates itself from other retailers with its business model. Most of its income comes from membership fees, which help cover company costs and keep prices low. It charges $60 per year for an annual membership and $120 per year for its higher-level plan, called Executive Membership.

Membership-based warehouse clubs have attracted more customers and won more of their wallets over the past three years. Shoppers who turned to the clubs to help load toilet paper and hand sanitizer into the pantry during the covid pandemic now they go there for cheaper gas and bulk groceries in times of inflation.

Walmart-owned Sam’s Club saw a similar increase in business. The number of its members reached a record high.

Yet even clubs felt under pressure as consumers pulled back due to inflation or spent instead on experiences such as travel and dining. In the past two quarters, Costco has reported a stronger mix of grocery sales as demand for higher-priced items slows and popular pandemic categories such as furniture and electronics.

Its net sales rose about 2% year-over-year to $52.6 billion, including inflation during the quarter ended May 7.

“These tough times are raining on all of us, especially with the bigger ticket and optional items,” Costco Chief Financial Officer Richard Galanti said on an earnings call in December.

Costco shares are up nearly 16% this year, beating the S&P 500’s roughly 14% gain. Shares closed Monday at $523.42.

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