The retailer has implemented stricter enforcement measures, requiring customers to provide their membership card when using self-checkout registers. Customers are asked to present a photo ID if the card does not have a photo. This new policy is in addition to the existing requirement of showing membership cards at regular registers.
According to Costco, the membership policy itself has not changed. The company has always asked for membership cards at the time of checkout. However, with the increased availability of self-checkout services, Costco has observed non-members using membership cards that do not belong to them. In response, the company believes it is unfair for non-members to receive the same benefits and pricing as its members.
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Costco's move to enforce membership card usage comes in the wake of Netflix's recent decision to restrict U.S. accounts to the account owner and people living with them unless an additional fee is paid for an "extra member." Costco's membership cards are explicitly stated as "non-transferable" as part of its membership policy. At the end of the third quarter, Costco reported 124.7 million cardholders.
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Under Costco's membership policy, members can assign a free household card to one other living with them. Additionally, cardholders can bring up to two guests on their trips to the wholesale retailer, but only members are allowed to make purchases. The company emphasizes that membership fees make its low prices possible, which helps offset operational expenses.
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In the third quarter, Costco's membership fees generated $1.04 billion in revenues, a 6% increase compared to last year. In the company's most recent fiscal year, total revenue reached $226.95 billion, with membership fees accounting for $4.22 billion. Net sales made up the remaining $222.73 billion, resulting in a net income of $5.84 billion for fiscal 2022.
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Costco currently operates nearly 840 locations worldwide, with a significant number in the United States.
By implementing stricter enforcement measures, Costco aims to ensure that only authorized members can access the benefits and pricing offered by the retailer. The company's commitment to maintaining the integrity of its membership policy is driven by its reliance on membership fees to support its operations and keep prices as low as possible.
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