Cosco seems to be the most popular girl in high school: everyone talks about it, everyone wants to spend time in its establishment, and everyone wants to shop there. However, Cosco is very demanding, and in the last year it has tightened access to its facilities. The wholesale giant has bargain prices, but you have to meet its requirements; if you don’t have a card proving that you are a member of its establishment, you won’t be able to get through the door, let alone pay at the checkout if you manage to sneak in.
Until relatively recently, quite a few people had a second Cosco membership card that a friend or family member had paid for. The most daring would simply borrow it, even if they looked nothing like the person in the photo. However, since last summer, when Costco began requiring members to scan their loyalty cards before entering its stores, lots of Americans who used to bypass this requirement have been left standing at the parking lot gate.
We can’t blame Cosco; these rules existed long before the household card was limited to one person. They have always required that the second membership card be in the name of a person living at the same address as the primary cardholder. In other words, only close family members or roommates were allowed to enter. It was not enough to show a postcard with that address; a person had to show a valid document with that address on it.
New Costco policy, or forgotten rule?
Most Costco members were unaware of Costco’s actual policies; it seemed that they were quite lax in enforcing the rules. However, the official rule for a standard membership has always allowed two cards: the primary cardholder’s card and a free household card.
That’s why they started requiring photo ID at self-checkout counters. If the card was old and didn’t have a photo, official identification was required for verification (i.e., showing a driver’s license, for example). Then they started asking to scan your card right at the entrance to the Costco warehouse. It has reached the point where many of Costco’s food courts also require a membership to buy a hot dog and soda. The impact was immediate; with these strict regulations, thousands of people who used borrowed cards were left without access to Costco. From then on, you either paid for membership or stayed at the door.
Why Costco has grown so strict with their entry policies
This new company policy from Costco is not a whim. The business model of this company differs from most retailers. The profitability of this company does not come from the profit margin on the products it sells, but from the annual membership fees paid by its customers. Thanks to the annual fee paid by its members, Costco can offer products at a lower price than other stores on the market. Thanks to this membership, Costco can sell products at incredibly low prices, almost at operating cost. In fact, in the last year, almost 80% of Costco’s profits came exclusively from membership fees.
Sharing the Cosco GoldStar card with people who had not paid for membership was directly affecting legitimate members. This was a net loss of income for the company. This is why Cosco has become so strict: it simply wants to maintain a pleasant experience for the average customer. This has also helped to prevent overcrowding in stores during peak hours. If you know someone who used to share their Cosco card and can no longer enter so easily, a good Christmas gift might be a membership. They will surely be very happy to shop at this store again without feeling like a stowaway.