Canadian shoppers: Costco cracking down on membership moochers

Traditionally, when shoppers go to Costco, they’re required to flash their membership cards to an employee when they walk in. But soon, some Costco shoppers will have to scan their cards at the door in a move analysts believe is to keep moochers out.

On its website, a statement reads, “Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse.”

On Monday, a Costco spokesperson told CTV News the scanners are currently being tested in Ottawa, Edmonton, Regina and B.C. Lower Mainland locations.

Before entering the store, shoppers will have to scan their physical or digital membership card. Guests must also be accompanied by a valid member for entry.

In a previous email response, Costco also said it was to “help prevent long waits at the cash register from membership questions, such as renewals, invalid membership, etc.”  

“This initiative is also to be more efficient at informing our members with their membership status and direct them accordingly,” wrote a company representative.

“It doesn’t bother me,” said Halifax shopper Helen Corkum, who added it would bother her if the door greeter were to lose the job

“I understand the purpose behind it. I see where they’re coming from. But also, I feel like it might take away some of the personability – the personal touch of Costco,” said Erin Sydney, another shopper in Halifax, who noted she likes how many employees Costco has, including greeters at the door. Bruce Winder, a retail analyst said he believes the move is to keep moochers out.

“I think it’s more to keep moochers out and to get more revenue, get more profit by getting more people to sign up and use the membership,” Winder said.

Winder says Costco is not the first giant to crack down on membership mooching, referencing Netflix’s campaign to limit password sharing.

“Everyone is sort of trying to tighten things up. They're at the point now where, in this economy, every dollar counts. Every nickel counts,” Winder said.

Annual membership fees make up the bulk of Costco’s profits and help keep prices down.

On Sept. 1, those fees will jump for the first time in seven years. Annual membership fees will go up by $5 to $65 per year while executive memberships will go up by $10 to $130 a year. Executive members will also see a bump in the maximum rewards they can claim.

While the scanners could keep non-members’ business away, Winder believes the business could also turn some of those people into customers.

“Some of those people who borrow someone else’s membership may say ‘OK, OK, I get it, I’ve been caught. Now I’m going to buy my own membership,'” Winder said.