Nothing gets California shoppers more fired up than changes at their beloved weekend hangout, Costco.
The club is rolling out new technology to keep nonmembers from venturing inside.
Entry scanners are popping up at warehouses nationwide. Shoppers must pass their membership card under the scanner in order to enter the store.
That means no more cheap pizza, hotdogs and diet-busting chocolate chip cookies at the food court — and no more sharing the deep discounts found in the warehouse aisles.
Employees will be watching for a matching face to appear on a tablet device positioned behind the scanner. If the face doesn’t match the membership, shoppers can expect a staffer to turn them away, offer up a membership or another line to get a new photo taken.
Why the sudden pivot by Costco?
In an earnings call in March, Richard Galanti, the company’s outgoing chief financial officer, said the company is paying more attention to membership sharing after relaxing the rules during the pandemic. The launch of self-checkout also meant shoppers could flash a card at the door and pay at a register without an employee realizing they’re not members.
“And so there’s probably an increasing but still small level of abuse of that privilege,” Galanti said. “We also had complaints from members saying, ‘I pay. Why shouldn’t they?’ So the view was we needed to just shore that up a little bit, and we did.”
How many people are sharing a membership?
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“Relative to the 60 million or 70 million members, it’s not terribly meaningful, but it’s more fair and the right thing to do,” Galanti said, who retired March 15.
Memberships are big business for Costco, representing 72% of company profits, according to a Motley Fool report. Sales margins also are notoriously low (one analyst pins them at just under 3%) thanks to costs and deep discounts on bulk items, household merchandise and clothing.
The rollout of scanners in California could bring even more business to the club, should nonmembers opt to sign up. The state, with the largest population in the nation, is home to more Costco warehouses than any state in the union.
The company’s website says California has 139 warehouses. Southern California has 64 warehouses alone, topping Texas with 41 and Florida with 33. Costco’s base in Washington state (population 7.8 million) has just 34.
Readers last week were quick to email us about Costco stores with entry scanners in use.
Those emails also provided some interesting feedback from Costco members, as the scanners caught many of them by surprise.
Here’s a look at the Costco membership card scanner popping up at warehouse stores across Southern California. This angle is shown from the employee’s perspective. Once a shopper scans their membership card, their face appears on the screen, allowing staff members to match the membership to the person entering the store. The shopper’s face has been blurred to protect their identity. If a photo doesn’t appear, that shopper will be asked to head to another line to have a new photo added to their membership card or Costco credit card. (Photos courtesy of Andrew O’Connor)
Here’s a recap from our email inbox:
“Worst Costco experience I’ve ever had,” wrote Kevin from Asuza. “My picture was no longer visible on my (credit card) so had to wait in a long slow line to get a picture taken.”
His advice to Costco was blunt: “If you’re going to implement a new scan/photo requirement, at least have a fully manned station to deal with all the problems it creates.”
Dennis in San Bernardino wrote that shopping at Costco is “never an easy experience.” When his store opened Sunday morning, he said the parking lot was already full. “Maybe it was the first of the month when people have money or to beat the heat.”
Scanning the cards, Dennis said, really slowed down the entrance to the store. “I can’t wait for the store being built in Highland to open.”
A Costco employee in Irvine told us he turned away several shoppers whose faces didn’t match the membership photos.
In Lakewood, shopper Marc said he was taken aback when a store employee loudly called out a member with an expired card.
“I thought it was incredibly crass to announce to everyone around us that a person’s membership was expired,” he wrote. “If I had been that customer, I would have objected very loudly about this person’s attitude.”
Not everyone was put off. James in Fontana applauded Costco’s efforts to keep out the scofflaws.
“Why would anyone think that it is OK to defraud the company and its members by brazenly entering and shopping without being a member? Let them go to Sam’s Club, or pay full retail elsewhere.”
But the scanners baffled Jeff in Seal Beach, who wrote, “The only reason I can think of for keeping nonmembers out of the warehouse is to keep them from getting free samples!”
Costco members, we’re certain, will appreciate fewer people crowding the sample tables.
Tips if you are not a Costco member:
Reader and tipster Mike reminded us that gift cards offer a clever workaround. “Have them give you $20 and buy them two $10 gift cards from Costco. You can shop at Costco with a gift card even if you’re not a member, paying for the balance of what you purchase with any credit card.”
Buy the booze: Costco is prohibited from keeping shoppers away from its alcohol. So, if you need wine, beer, hard seltzer or spirits, you can shop at Costco without a membership.
Go fill a prescription: The pharmacies at Costco are all open to the public. We’ll note that shoppers with flexible or health spending accounts can buy things like sunscreen, bandages, rubbing alcohol and other healthcare items using those cards at the pharmacy cash register.
The scanners aren’t the only thing Costco shoppers are griping about. The club recently changed its popular rotisserie chicken container from a plastic box with lid to a plastic bag. Some say it leaks, others say “not so much.”
The popular and cheap churro once sold at the food court was replaced with a $2.50 chocolate chip cookie. It’s served warm and sometimes gooey and adds 750 calories to the diner’s daily intake.
Costco membership prices are going up Sept. 1: The new fees, taking effect Sept. 1, will raise the price of Costco’s Gold Star membership to $65 from $60 annually. The Executive membership is rising to $130 from $120.
If you’ve seen scanners at your Costco (that’s not already in our list) or see the crowd of shoppers decrease, please let us know by emailing sgowen@scng.com
