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Unless I read it wrong - it seems that the change is that instead of a person waving you into the store when you show the card, they'll require scanning the card. Not sure how that will stop anyone from sharing their card with a non-member. I don't think I've ever had store employee take a close look at my card when entering a Costco to confirm that I'm the member. So not sure how this will discourage 'sharing' the membership card. Unless they plan on using facial recognition. Which is also doubtful, since membership Id photos are taken using a cheap webcam at the customer service counter.
They had these out at the local Costco last night. Just a card scanner. Honestly, it wasn't that different from the "wave your card at the person in the front" system they had before -- it didn't slow things down much.
I have to assume that much like gyms they will have displays that will pop up the associated picture on file on entry. Not facial recognition, and it sounds like the person will still be standing there just like they do now and they can reference the picture match manually. In practice they seldom if never would, but it's a risk for people sharing cards.
As is the checkout person will essentially never deny someone based on a mismatch because it causes quite a logistic issue to deny someone who has a big cart of goods, most of which are sitting on the belt, then to suddenly refuse their service.
nope. they have the scanners at the entrance to the SF store.
it's just a barcode reader. Nothing more.
And nope on your 2nd point - I've seen cashiers deny a purchase due to some membership problem, the cashier puts everything back in the cart
I don’t really get how change is a crackdown either. They check at the entrance and the register already.
No more inexpensive hotdogs for nonmembers
There is a person watching. Don’t know what they see, but at least now it’s in your face at the entrance
At least at our Costco store, there was no person at the entrance. I could and did just walk in and look around the store before I decided to get a membership. Honestly if I had wanted to swipe something and stick it in my pocket I might have gotten away with it. But now it's a scanner. So certainly an improvement to security in that respect.
In case others did not know, Costco makes the majority of their money from annual memberships, not the inventory they sell.
I know this is true but I find it so hard to believe. Are there really that many people out there not getting value out of their memberships? I saved enough money on tires compared to everywhere around me to cover multiple years of my membership fees. I guess the math just lines up in a way I don't understand.
I doubt there is very little cost to memberships for Costco. So it has extremely high margins.
Since the products that are being sold in Costco are close to wholesale they also carry a margin, just not as high. So even if 100% of the memberships were used, they would still make a nice tidy profit. Purely because the products literally pay for themselves. This is primarily due to how Costco has low costs to having little need for additional warehouses outside of their public warehouses. Their cost of goods sold vs revenue is about 87%. So about 13% profit. That is just the goods themselves.
So the more I think about this, there has to be some sort of cost to memberships. Especially for people arriving, because if there was no cost, why implement these scanners? While memberships help with profit, there is a huge cost to implementing something that could scare your customers away.
I also think the whole "makes a majority of their money" needs further explanation. The highest percentage of their profit is from the membership fees. The highest percentage of revenue is from the goods sold is my bet.
Its simply that the inventory they sell is most likely priced in such a way that it covers the cost of the product and its existence inside of the warehouse. Costco has very aggressive vendor terms and they sell the inventory before they are having to pay the vendor for it.
Said another way, they break even or have slight margin on selling products, this includes the executive membership annual check.
They dont lose money on those sells, rather they just don't markup like everyone else does.
The mark-up on products tends to be so big that it looks impossible to buy at Costco prices without costing them money.
Clearly they should close those expensive warehouses, sell the real estate, fire 99% of employees, and just sell the memberships.
They searched my bag one day when I was leaving. Said the small print in the membership agreement gave them the right to search without my consent. So I turned around went to the desk and cancelled the membership. Never going back. They can keep the $5 chicken
Your bag as in your bag of purchases?
Or something like a hand-bag / purse / backpack?
> Costco reserves the right to inspect any container, backpack, briefcase, or other bag, upon entering or leaving the warehouse and to refuse entry to anyone at our discretion.
Which makes me wonder, can I refuse a Walmart receipt check? I never agreed to their inspection.
It was a backpack with my work laptop and so on. Thin.
Isn't that on you for not reading the fine print of their agreement?
It’s completely fair to draw a line at not giving up consent to be searched and canceling a Costco membership that signs away those rights lines up with that.
Great, let's just put membership data on an app and let NFC wave us through. Why are we carrying around these plastic cards? You either have to make it a daily carry in your wallet or risk leaving it at home.
The app is also your membership “card“. I haven’t used a physical Costco card for many years.
TIL.
Doesn’t work at gas station though.
How does this work, given the pharmacy is open to non-members?
Additionally, anyone with a gift card is entitled to shop there without a membership.
I don’t see how the burden on cashiers is changed.
At the San Francisco Costco, they don't let anyone in without a membership for any reason, at least without a huge argument. Food court? no. Have a gift card? no. Just buying liquor? no. Have an eye doctor appointment? no. I had to call the store, ask for manager, they then escorted me to the eye doctor where they watched me do the paperwork with the receptionist. Only then did they let off.
Given the surge in shoplifting in San Francisco these past few years, this doesn’t surprise me.
Alcohol as well, non-members can go in at buy that too.
> "It helps speed up the process," Richard Galanti, Costco's former chief financial officer, told Axios in January.
> "When you go through checkout, particularly self-checkout, there's not someone there having to review the card again," Galanti said.
As far as I can tell, it's not going to prevent reviews at checkout (unless there are scanners there), not to mention the card still needs to be used to tie the purchases to the member... it's not like they are going to be like Amazon Go. Even if it does speed up checkout, it will just move the slowdown from checkout to store entry, so it doesn't seem like anything is actually being saved.
Couldn't the POS pull up your picture when they scan the card? No idea if they do or not but would make sense.
There definitely is savings but I think you are reading it the wrong way. The ultimate goal here is to prevent people from using someone else's card. Costco makes all their money from the annual membership dues. I suspect they have tested this and there is savings with doing proper checks at store entry and saving the hassle of carts full of goods when denied at checkout. Ultimately driving more memberships.
Nothing is being saved? Well from the store manager’s perspective, the only time being wasted now belongs to the customers, and isn’t any of his or his budget’s concern.
I've only been to Costco once here in the UK (as I'm not eligible for membership - the criteria are quite tight here), but they had a person and a scanner checking cards on the entrance.
Maybe that's because of the stricter eligibility rules.
https://www.costco.co.uk/membership-individual-questions
Looks like you need to be employed in certain sectors, or have your company hook you up. Sounds almost like a credit union.
Oh wow, sounds like what the Makro used to to in Belgium for the longest time. You could only get in if you had a BTW number (think registered company, including self employed.).
But they stopped doing that ~10 years ago or so.
Now I'm curious what the criteria are. Oxbridge graduate?
You have to work in specific industries or work in specific job roles:
https://customercare.costco.co.uk/app/answers/detail/a_id/85...
Apparently, by targeting the Wholesale market - plus a limited range of general consumers, they are able to class their stores as wholesale warehouses, which can be opened in locations where a general retail store wouldn't be permitted. That makes purchasing or leasing land for the store much cheaper.
Automated scanning can be correlated with security video feeds for facial recognition/confirmation against saved ID photo.
Today was the first time I was presented with a scanner at Costco
Scanning the card would allow them to monitor the frequency that any particular member goes to the store, and with data analysis they would be able to detect unusual patterns, such as the same member going in multiple times per day/week.
They can already do that when a purchase is made, since that already requires a membership.
Right? Checking at the door is all "security theatre", you have to scan your card when you check out anyways.
They check them at the door but never verify the picture
Even then they don't really examine the card. Most of the time I just flash my card for a brief second while I'm walking and the person at the door just nods and moves onto the next person behind me.
Am I the only one that hates shopping at Costco? I'm 5 seconds away from cancelling it and joining the evil sam Walton empire because they have curbside pick up, scan and go, and store lay outs that rarely change.
Their stores are so damn frustrating and I hate spending whole afternoons shopping there.
Personally, I love Costco and find their product quality and employees to be better than Walmart / Sam's Club. The number of Costco members keeps increasing year over year so clearly they're doing something right [1].
Walmart curbside is huge for those that are short on time, but Costco has cheaper prices and better products.
So my spouse and my kids now need me to shop at Costco all the time?
Your spouse can (and should) have their own card.
No, your kids do not need to constantly be in the Costco.
Your spouse can get her own card.
Having said that, this will probably piss me off. Why can’t the cashier do this and deny at the time of purchase.
Costco’s customer friendliness is why I shop there, and this is not customer friendly. Seems like a bean counter had a brilliant idea. /s