Costco Wholesale Corporation (NASDAQ:COST) announced that it is strictly enforcing membership card use, checking its shoppers for their photo ID at self-checkout lanes in a move to prevent membership card sharing.
The company recently expanded its self-checkout and noticed non-members were taking advantage there, a spokesperson told CBS (NYSE:CBS) News.
“We don't feel it's right that non-members receive the same benefits and pricing as our members,” the spokesperson said.
The company spokesperson added that its membership policy hasn't changed and that memberships have never been transferable and Costco employees have always asked customers to present their cards at checkout.
Costco stated it has 119 million customers and its basic “gold star” membership costs $60 per year and is good for up to two people per household, while the “executive” membership is double the price with additional perks.
Membership fees account for the majority of Costco's profit, allowing the company to keep product prices lower than similar grocery stores and retailers, USA Today reported.
Costco's move follows Netflix's decision to restrict subscription sharing.
Shares of Costco edged up 0.2% to $531.49 in early afternoon trading on Wednesday and have gained 17% year to date.
Contact Sean at sean@proactiveinvestors.com