Costco Is Starting To Home In On Shared Memberships

AMEX used the phrase "membership has its privileges." While the idea of stepping beyond the velvet rope might evoke images of the "in-crowd," the reality is that paying a fee to be part of a group or have access to a service is not a new concept. Although password sharing might feel like bucking the system, Costco is the latest corporation putting a kibosh on the sharing is caring membership hack.

According to TheStreet.com, some Costco warehouse locations are becoming more stringent with their membership checking. It appears that some people are "borrowing" membership cards and using self-checkout. Even though photos are printed on cards, the warehouse store might not have been as diligent as it could have been when checking the valid form of identification.

As "sharing" memberships becomes more prevalent, the crackdown has begun. From signs reminding customers that non-transferable memberships are required for shopping to employees checking photo identification, the shareable warehouse membership concept is going the way of sharing Netflix passwords.

As stated in Costco's membership terms, the 12-month Costco membership can be terminated at Costco's discretion, and without cause. It is unclear whether the warehouse company has or will terminate members who share their membership. One household membership card is available for anyone over the age of 16 living at the same address, but there is no group sharing option. It seems that entrance, exit, and checkout will soon require a membership card check at Costco.

While many people appreciate a great deal, breaking the rules in order to save is not a hack, it can be a form of stealing. With some people choosing to share Costco membership to save on that annual fee, the company crackdown isn't about big business trying to stick it to the little guy. Membership fees are part of the reason why the warehouse store's prices are lower.

ABC 7 Chicago reported Costco responded to the membership sharing situation by stating, "Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses...We don't feel it's right that nonmembers receive the same benefits and pricing as our members."

Currently upwards of 69 million households have a Costco membership. The annual fee is part of the company's business model and directly impacts its bottom line. While the $60 or $120 annual fee can be substantial, many people feel that the upfront cost is offset by the annual shopping savings within the warehouse — which could be why Costco is a popular place to shop.

Whether Costco adopts a Netflix-style multiple home sharing policy, uses a family plan similar to Instacart, or continues its single household requirement, remains to be seen. For now, the picture on the card better match the person in front of the register. Otherwise, those items in the cart might be headed back to the shelf.