Costco is Making a Major Change That Will Impact Its Consumers

Costco takes a page from other big-name companies to tighten up potential lost profits.

On Monday, the membership-only shopping giant announced that it will begin requiring entering customers to scan their membership cards rather than simply showing them to a waiting attendant. Additionally, Costco also plans to increase their annual membership fee by $5 for a Gold Star Member bringing the total from $60 to $65. Executive Members can expect to pay an extra $10 dollars, bringing their dues from $120 to $130.

Changes takes effect next month. Costco CFO Richard Galanti said the issue of people being able to skip out on a membership fee really ramped up after the company introduced self-checkout lines. Costco looked the other way during the height of the pandemic as people would send someone else to do their shopping after many people were encouraged to stay home to lessen the spread of the virus.

Since 1983, Costco has been in business, touting 128 million members as of this year. With headquarters in a suburb of Seattle, Washington, the 40-year-old company has 879 locations worldwide, with over 600 of those in the United States and Puerto Rico. The company leaned into its image of a no-frills outlet, stacked to the warehouse ceiling with home goods, grocery items, and electronics.

Access to Costco is only offered to those with an active membership is their selling point, with the promise that they only stock products at a low price point, and in a higher volume. Shoppers will see two or three options of one particular product as opposed to a competitor who may carry multiples of a product. The limited selection of a variety of models has helped to gain fans of the warehouse chain.

Their food court has become it’s own draw with hungry shoppers lining up to buy their affordable hot dog meal at $1.50, a price that has not changed in the company’s history. And, once inside, there’s no shortage of food samples, enticing shoppers to impulse-buy their snacks.

Costco temporarily stopped the free sample giveaway during the pandemic but then once returned, had changed some things about the service. Several self-service kiosks with a pre-filled amount of food can be seen in some stores and a separate company provides the employees to distribute the snacks to customers, no longer a Costco employee doing the work.