Netflix is no longer the only company to start cracking down on sharing memberships, as Costco says it will begin asking customers for photo IDs to use self-checkout registers.
Costco shared that since they have expanded their self-checkout option, more and more non-members have begun sneaking through, buying their items with a membership card that isn’t theirs.
To combat this, the company will now extend the same policy they have at their regular checkout lanes, requiring members to have a photo ID with them.
“We don’t feel it’s right that nonmembers receive the same benefits and pricing as our members,” Costco said in a statement.
Costco members pay $60 for a regular annual membership or $120 for an executive-level membership, which comes with added perks. In total, the retailer has approximately 120 million members, making it one of the largest clubs in the world.
While others in the industry have raised their membership fees in recent years, like Amazon and Sam’s Club, Costco has not touched its pricing since 2017.
Audacy reported about another price point that the retail giant won’t touch: its hotdog combo.
The cost for a Costco hotdog, which includes a drink, has been $1.50 since 1985, and Economist Chris Thornberg of Beacon Economics, who spoke with Audacy’s “Something Offbeat” podcast, says that keeping the price point the same is not hurting the retailer at all.
“Why not? Look, Costco’s profit margin is fat enough that they can give away hot dogs to do it,” Thornberg explained.
During an earnings call last September, CFO Richard Galanti shared that the price for the hotdog will remain at its $1.50 mark no matter what. The CFO had similar thoughts to Thornberg, noting that their margins allow them to keep its price stagnant.
“Some businesses that are doing well with margin, those things help us be more aggressive in other areas, or, as you mentioned, hold the price on the hot dog and the soda a little longer. Forever,” Galanti said.
Where Costco’s business really makes its money is with its memberships, as the fees help boost the company’s profit and offset expenses. Any changes to the membership that stunts growth could be detrimental to the company’s profits.
“The extent to which we achieve growth in our membership base, increase the penetration of Executive membership, and sustain high renewal rates materially influences our profitability,” Costco says routinely in its annual filings, CNN reported.
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