
Nothing gets Southern California shoppers more fired up than changes at their beloved weekend hangout, Costco.
The club is rolling out new technology to keep nonmembers from venturing inside.
Entry scanners are popping up at warehouses nationwide. Shoppers must pass their membership card under the scanner to gain entry to the store.
That means no more cheap pizza, hot dogs and diet-busting chocolate chip cookies at the food court — and no more sharing the deep discounts found in the warehouse aisles.
Employees on the other side of the scanner will be watching for a matching face to appear on a tablet device positioned behind the scanner. If the face doesn’t match the membership, shoppers can expect a staffer to turn them away, offer up a membership or a line to get a new photo taken.
Why the sudden pivot by Costco?
In an earnings call in March, Richard Galanti, the company’s outgoing chief financial officer, said the company is paying more attention to membership sharing after relaxing the rules during the pandemic. The advent of self-checkout also meant shoppers could flash a card at the door and pay at a register without an employee realizing they’re not members.
“And so there’s probably an increasing but still small level of abuse of that privilege,” he said. “We also had complaints from members saying, ‘I pay. Why shouldn’t they?’ So the view was we needed to just shore that up a little bit, and we did.”
How many people are sharing a membership?
“Relative to the 60 million or 70 million members, it’s not terribly meaningful, but it’s more fair and the right thing to do,” Galanti said, who retired March 15.
Memberships are big business for Costco, representing 72% of company profits, according to a Motley Fool report. Sales margins also are notoriously low (one analyst pins them at just under 3%) thanks to costs and deep discounts on bulk items, household merchandise and clothing.
The rollout of scanners in California could bring even more business to the club, should nonmembers sign up. The state, with the largest population in the nation, is home to more Costco warehouses than any state in the union.
The company’s website says California has 139 warehouses, with 64 of them in Southern California. No other state comes close. Texas has 41 and Florida just 33. Costco’s base in Washington state (population 7.8 million) has only 34.
Readers recently were quick to email us about local Costco stores with entry scanners. That list grows daily and so far includes warehouses in Tustin, Laguna Niguel (Cabot), Aliso Viejo, Irvine, Garden Grove, La Habra, Yorba Linda (Savi Ranch), Cypress, Pacoima, Huntington Beach, Fountain Valley, Lake Elsinore, Montclair, Hawthorne Lakewood, Signal Hill, San Dimas, Alhambra, Inglewood, Burbank, Van Nuys, Santa Clarita, (north) Fontana, Murrieta, Palm Desert, La Quinta, San Bernardino and Victorville.
Those emails also provided some interesting feedback from Costco members, as the scanners caught many of them by surprise.
Here’s a recap from our email inbox:
“Worst Costco experience I’ve ever had,” wrote Kevin from Asuza. “My picture was no longer visible on my (credit card) so had to wait in a long slow line to get a picture taken.”
His advice to Costco was blunt: “If you’re going to implement a new scan/photo requirement, at least have a fully manned station to deal with all the problems it creates.”
Dennis in San Bernardino wrote that shopping at Costco is “never an easy experience.” When his store opened Sunday morning, he said the parking lot was already full. “Maybe it was the first of the month when people have money or to beat the heat.”
Scanning the cards, Dennis said, really slowed down the entrance to the store. “I can’t wait for the store being built in Highland to open.”
A Costco employee in Irvine told us he turned away several shoppers whose faces didn’t match the membership photos.
In Lakewood, shopper Marc said he was taken aback when a store employee loudly called out a member with an expired card.
“I thought it was incredibly crass to announce to everyone around us that a person’s membership was expired,” he wrote. “If I had been that customer, I would have objected very loudly about this person’s attitude.”
Not everyone was put off. James in Fontana applauded Costco’s efforts to keep out the scofflaws.
“Why would anyone think that it is OK to defraud the company and its members by brazenly entering and shopping without being a member?
“Let them go to Sam’s Club, or pay full retail elsewhere.”
But the scanners baffled Jeff in Seal Beach, who wrote, “The only reason I can think of for keeping nonmembers out of the warehouse is to keep them from getting free samples!”
Costco members, we’re certain, will appreciate fewer people crowding the sample tables.


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