Nothing excites Southern California shoppers more than the changes at their favorite weekend hangout, Costco.
The club introduces new technology to prevent non-members from entering the club.
Entrance scanners are popping up in department stores across the country. To enter the store, customers must hold their membership card under the scanner.
That means no more cheap pizza, hot dogs and diet-busting chocolate chip cookies in the food court – and no more opportunities to share the deep discounts on the warehouse shelves.
Employees wait for a matching face to appear on a tablet device behind the scanner. If the face doesn’t match the membership, customers can expect an employee to turn them away, offer them a membership, or put them in another line to have a new photo taken.
Why the sudden turnaround at Costco?
In a conference call in March, Richard Galanti, the company’s outgoing chief financial officer, said the company was putting more emphasis on sharing memberships after rules were relaxed during the pandemic. The introduction of self-checkout also meant customers could show a card at the door and pay at a register without an employee noticing they weren’t members.
“And so there’s probably an increasing, but still small, abuse of that privilege,” Galanti said. “We’ve also had complaints from members saying, ‘I’m paying. Why shouldn’t they?’ So the view was that we just needed to shore that up a little bit, and that’s what we’ve done.”
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How many people share a membership?
“It’s not particularly significant relative to the 60 or 70 million members, but it’s fairer and the right thing to do,” said Galanti, who retired on March 15.
Memberships are big business for Costco, accounting for 72 percent of the company’s profits, according to a Motley Fool report. Sales margins are also notoriously low (one analyst puts them at just under 3 percent) due to the cost and deep discounts on bulk items, household goods and clothing.
The introduction of scanners in California could bring even more revenue to the club if non-members decide to join. The state with the largest population in the US is home to more Costco stores than any other state in the union.
The company’s website says California has 139 warehouses. Southern California alone has 64 warehouses, ahead of Texas with 41 and Florida with 33. Costco’s location in Washington state (population 7.8 million) has just 34.
Readers quickly emailed us last week about local Costco stores that have entry scanners in place. That list is growing daily and so far includes warehouses in Tustin, Laguna Niguel (Cabot), Aliso Viejo, Irvine, Garden Grove, La Habra, Yorba Linda (Savi Ranch), Cypress, Lakewood, Signal Hill, San Dimas, Alhambra, Inglewood, Burbank, Van Nuys, Santa Clarita, (North) Fontana, Murrieta, Palm Desert, La Quinta, San Bernardino and Victorville.
These emails also provided some interesting feedback from Costco members, as many of them were surprised by the scanners.
Here is a summary from our email inbox:
“This was the worst Costco experience I’ve ever had,” wrote Kevin from Asuza. “My picture was gone from my (credit card) so I had to wait a long time in a slow line to get a photo taken.”
His advice to Costco was blunt: “If you’re going to implement a new scan/photo policy, you should at least have a fully staffed station to handle all the issues associated with it.”
Dennis of San Bernardino wrote that shopping at Costco is “never a pleasant experience.” When his store opened Sunday morning, the parking lot was already full, he said. “Maybe it was the first of the month, when people have money or want to get out of the heat.”
Scanning the cards, Dennis said, has really slowed down the entrance to the store. “I can’t wait for the store that’s being built in Highland to open.”
A Costco employee in Irvine told us he turned away several customers whose faces did not match member photos.
In Lakewood, customer Marc said he was surprised when a store employee loudly spoke to a member with an expired card.
“I found it incredibly crass to announce to everyone around us that a person’s membership had expired,” he wrote. “If I had been that customer, I would have protested very loudly against that person’s attitude.”
Not everyone was deterred. James of Fontana praised Costco’s efforts to keep the lawbreakers away.
“Why would anyone think it’s OK to defraud the company and its members by brazenly going into the store and shopping there without being a member? Let them go to Sam’s Club or pay full retail price somewhere else.”
But the scanners baffled Jeff of Seal Beach, who wrote, “The only reason I can think of to keep non-members out of the camp is to prevent them from getting free samples!”
We’re sure Costco members will appreciate having fewer people crowding the tasting tables.
Tips if you are not a Costco member:
Reader and tipster Mike reminded us that gift cards are a smart solution. “Get $20 and buy two $10 Costco gift cards. You can use a gift card to shop at Costco, even if you’re not a member, and pay the balance of your purchases with any credit card.”
Buy the alcohol: Costco is prohibited from keeping customers away from its alcohol, so if you need wine, beer, hard seltzer or spirits, you can shop at Costco without a membership.
Get a prescription: The pharmacies at Costco are all open to the public. Note that customers with flexible accounts or health spending plans can use these cards at the pharmacy checkout to purchase things like sunscreen, Band-Aids, rubbing alcohol, and other health supplies.
The scanners aren’t the only thing Costco customers are complaining about. The club recently switched its popular fried chicken container from a plastic box with a lid to a plastic bag. Some say it leaks, others say “not so much.”
The popular and inexpensive churro formerly sold in the food court has been replaced by a $2.50 chocolate chip cookie. Served warm and sometimes gooey, it adds 750 calories to a diner’s daily calorie intake.
Costco membership prices increase September 1: The new fees, which take effect September 1, increase the price of Costco’s Gold Star membership from $60 to $65 per year. The Executive membership increases from $120 to $130.
If you have seen scanners in your Costco (that is not yet on our list) or notice that shopper crowds are decreasing, please let us know by emailing [email protected].
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