Costco cracking down on membership sharing a la Netflix

Aug 8

Karah Rucker Anchor

By Karah Rucker (Anchor), Zachary Hill (Video Editor), Brock Koller (Senior Producer)

Costco is joining in on the crackdown on subscription sharing by adding measures to make sure only the customers who have membership cards are using them. The big box company said membership scanning devices are on the way after a test run at some stores.

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“Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse,” Costco said in an online statement. “Once deployed, prior to entering, all members must scan their physical or digital membership card by placing the barcode or QR code against the scanner.”

Guests must be accompanied by a Costco member to enter its stores. For those members whose cards don’t have a picture, shoppers will need to bring a valid photo ID to prove they are the true Costco member.

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Last year, Costco began requiring customers to show their membership cards along with a photo ID to use the self-checkout. Costco, at the time, said, “We don’t feel it’s right that nonmembers receive the same benefits and pricing as our members.”

While not yet going the lengths of Costco, other warehouse club spaces have similar messaging. BJ’s said it “reserves the right to require that membership cards be shown upon entry into its stores.” Sam’s Club said, “For security purposes, only you the member on record, may use your membership card.”

While security may be one of the reasons these companies crack down on membership sharing, profits are another. In 2023, Costco earned $4.6 billion in revenue from those fees — an 8% increase from the previous year. On top of this talk about membership sharing, Costco announced in July it will be increasing the price of membership by $5, for the first time since 2017.

If this whole membership crackdown sounds familiar, it might be because of Netflix and its password crackdown, which proved to be a successful move. The streaming giant added more than 9 million subscribers in the first quarter of the year and reported over $9 billion in revenue, a 15% increase year-to-year.

Disney is following suit. CEO Bob Iger told shareholders on Wednesday, Aug. 7, that its plans to curb password sharing have begun.

“We started our password-sharing initiative in June,” Iger said. “That kicks in, in earnest in September. By the way, we’ve had no backlash at all to the notifications that have gone out and to the work that we’ve already been doing.”

Disney also recently announced it will be increasing the monthly subscription prices on its streaming services starting in September.

Tags: Costco, Netflix, shopping

[BARNEY]

“THEY REALIZED THE SAME THING. SHARING MAKES EVERYONE FEEL GREAT.”

[KARAH RUCKER]

SORRY TO BREAK IT TO YOU BARNEY – BUT NOT EVERYONE IS FEELING SO WARM AND FUZZY ABOUT SHARING THESE DAYS.

TAKE COSTCO FOR INSTANCE – THE BIG BOX STORE ANNOUNCING IT IS CRACKING DOWN ON MEMBERSHIP SHARING.

THE COMPANY SAYS MEMBERSHIP SCANNING DEVICES ARE ON THE WAY AFTER A TEST RUN AT SOME STORES.

COSTCO SAYING:

“Over the coming months, membership scanning devices will be used at the entrance door of your local warehouse. Once deployed, prior to entering, all members must scan their physical or digital membership card by placing the barcode or QR Code against the scanner.”

GUESTS MUST BE ACCOMPANIED BY A COSTCO MEMBER TO ENTER ITS STORES.

AND FOR THOSE MEMBERS WHOSE CARDS DON’T HAVE A PICTURE – YOU’LL NEED TO BRING A VALID PHOTO ID TO PROVE YOU ARE THE TRUE COSTCO MEMBER.

LAST YEAR – COSTCO BEGAN REQUIRING CUSTOMERS TO SHOW THEIR MEMBERSHIP CARDS ALONG WITH A PHOTO ID TO USE THE SELF-CHECKOUT.

COSTCO AT THE TIME SAYING “WE DON’T FEEL IT’S RIGHT THAT NONMEMBERS RECEIVE THE SAME BENEFITS AND PRICING AS OUR MEMBERS”

WHILE NOT YET GOING THE LENGTHS OF COSTCO — OTHER WAREHOUSE CLUB SPACES HAVE SIMILAR MESSAGING.

BJ’S SAYS IT RESERVES THE RIGHT TO REQUIRE THAT MEMBERSHIP CARDS BE SHOWN UPON ENTRY INTO ITS STORES.

AND SAM’S CLUB SAYS “FOR SECURITY PURPOSES, ONLY YOU THE MEMBER ON RECORD, MAY USE YOUR MEMBERSHIP CARD.”

WHILE SECURITY MAY BE ONE OF THE REASONS THESE COMPANIES CRACK DOWN ON MEMBERSHIP SHARING, PROFITS ARE ANOTHER. IN 2023 – COSTCO EARNED 4.6 BILLION DOLLARS IN REVENUE FROM THOSE FEES – AN 8 PERCENT INCREASE FROM THE PREVIOUS YEAR.

IF THIS WHOLE MEMBERSHIP CRACKDOWN SOUNDS FAMILIAR– YOU MAY BE THINKING ABOUT NETFLIX AND ITS PASSWORD CRACKDOWN.

WHICH PROVED TO BE A SUCCESSFUL MOVE.

THE STREAMING GIANT ADDED MORE THAN 9 MILLION SUBSCRIBERS IN THE FIRST QUARTER OF THE YEAR AND REPORTED OVER 9 BILLION DOLLARS IN REVENUE – A 15 PERCENT INCREASE YEAR TO YEAR.

AND DISNEY IS FOLLOWING SUIT — CEO BOB IGER TELLING SHAREHOLDERS ON WEDNESDAY THAT ITS PLANS TO CURB PASSWORD SHARING HAVE BEGUN.

[BOB IGER | DISNEY CEO]

“We started our password-sharing initiative in June. That kicks in, in earnest in September. By the way, we’ve had no backlash at all to the notifications that have gone out and to the work that we’ve already been doing.”

[KARAH]

SO BARNEY YOU MAY WANT TO REVISE YOUR MESSAGE — SHARING IS CARING – JUST NOT WHEN IT COMES TO BIG BOX STORES OR STREAMING SERVICES.

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