By Melissa Repko - CNBC
Costco seems to be copying Netflix.
The company is cracking down on those who sneak into its stores and try to shop using the membership cards of others, the wholesale chain said.
Costco said it has always asked shoppers to show their membership cards at checkout, but is now asking them to show the photo on them and, if they have a card without a photo, to present identification to corroborate their identity.
"We do not believe it is fair for non-members to receive the same benefits and prices as non-members," the company said in a statement.
Shoppers at a Costco location in New York, Saturday, May 13, 2023.Getty Images
Stores, which can be accessed by paying for a membership, have noticed that card use by non-club members has skyrocketed since the expansion of self-service checkout.
The increased controls were previously reported by The Dallas Morning News.
Memberships support Costco
Costco differs from other wholesalers by its business model. Most of their earnings come from membership payments, which helps the company cover expenses and keep prices low.
The company charges $60 for its annual membership and $120 for a special plan, called Executive Membership.
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Stores like Costo, based on a membership, have attracted many more customers and revenue over the past three years. Shoppers who flocked to their stores for toilet paper and hand sanitizer during the COVID-19 pandemic are now flocking to cheaper gasoline and food, in response to inflation.
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Walmart-owned Sam's Club chain of stores has also seen an increase in clientele, with membership reaching a record high.
However, even these types of chain stores have felt the pressure when consumers have limited their purchases due to inflation, or have decided to spend their money on trips and dinners away from home.
The sale of food rises and that of other products decreases
Over the past two quarters, Costco has recorded a higher share of sales from food as demand for more expensive products such as furniture and electronics slowed.
Costco's net sales last year rose 2% to $52.600 billion. That figure includes the impact of inflation during the quarter that ended May 7.
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"It rained down on all of us during tough times, particularly when it came to [selling of] expensive products," Richard Galanti, Costco's chief financial officer, said during a December earnings conference call.
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Costco shares have risen 16% this year and have outpaced the 14% growth of the S&P 500 index. The shares closed Monday at $523.42.