Even the cashier checking is ridiculous. The picture on my card is from over 20 years ago and was printed in low resolution b&w on my current card over 10 years ago. It is a giant smudge that looks like no one.
Mine is so old that it doesn't have a picture on it and it's never an issue at two warehouses in the Silicon Valley that I frequent. No one has even mentioned the lack of a picture.
Just a guess but maybe denying at time of purchase costs them more than it's worth. Lots of go-backs from a cart full of stuff, and some of it is perishable and you don't know how long it's been in the cart, so more shrink. Cheaper just to deny at the entrance.
Denying at time of purchase would be a significant (depending on frequency of occurrence I guess) additional workload on staff. The guests certainly aren't going to be restocking all the stuff they grabbed.
As for the customer friendliness of the proposed scanner, in my mind it depends on how quick and easy it is. If it's not too much of a slowdown relative to the current "flash my card at the staff person", then I don't think I'd mind it. However, if it starts causing lines to get in, yeah that's going to be a problem.
Additionally, I agree with the other commenter that, just from the details as provided, I don't even see how the proposal will solve the problem. A scanner will check that the card is a valid card, but unless it's paired with some kind of facial recognition, I'm not sure how it will prevent card sharing.
They have your picture on file. The reader at the entrance shows your picture to the employee. No need for facial recognition. And its practically no different then what they do today. Years ago the club warehouses used to do a quick look at the picture side, not a huge change in friendliness in my opinion.
My card has my picture. If an employee is going to look at it, then no reader needed. And you point out that they used to do this. What is the reader accomplishing then?
You are creating a scenario that does not even exist. The card readers are already implemented in stores, they have tested the time savings. The card reader process is essentially the same. You flash your barcode to the reader instead of the person. Why would there be a line, its not like you are crossing the Berlin wall, its just a check a more rigid check at entrance instead of checkout.
Of course your picture is on your card but I think we would all agree that a picture on a 3x2 credit card that can be B&W is inferior to the color picture displayed on an ipad. Having an associate look at a picture on the back of a credit card is slow.
It depends on store location but they have always had varying degrees of checking that you are the owner of the card. Costco makes a majority of their profit from Membership fees, hence the desire to enforce the long standing rule.
The card check at entrance and “club” concept serves another purpose: it deters random people from going to Costco to steal or cause problems. Retail theft is a major problem for most stores these days, unfortunately.
Something changed at the top with costco a year or three ago. The friendliness seems gone, and replaced by some really strange/hostile policies.
I ended up in a shouting match with the tire center manager who claimed I was in a "car accident", and thus my road hazard warranty was void after I took a nail on the freeway. I was not in a car accident, I would have known -- I was there.
30 minutes of my life I'll never get back grappling with him and the store manager -- for them to try saving a $90 pro-rata credit. My tire business has been pulled out of costco after like 25 years. It's getting tough to justify the rest of the membership. It's always a shopping hellscape there, and everyone is rude/grumpy.
Unless I read it wrong - it seems that the change is that instead of a person waving you into the store when you show the card, they'll require scanning the card. Not sure how that will stop anyone from sharing their card with a non-member. I don't think I've ever had store employee take a close look at my card when entering a Costco to confirm that I'm the member. So not sure how this will discourage 'sharing' the membership card. Unless they plan on using facial recognition. Which is also doubtful, since membership Id photos are taken using a cheap webcam at the customer service counter.
At least at our Costco store, there was no person at the entrance. I could and did just walk in and look around the store before I decided to get a membership. Honestly if I had wanted to swipe something and stick it in my pocket I might have gotten away with it. But now it's a scanner. So certainly an improvement to security in that respect.
Some jurisdictions also require that alchohol sales can’t be members only and if you tell them at the enterance you are only there to buy alcohol, they have to let you in and if you buy only alcohol, they have to let you purchase it. I did this at Sam’s club once.
I’m sure it’s Costco by Costco, but at every Costco that I’ve been to, you get to customer service and tires by going in at the exit and they don’t check your card if you walk in the exit at all.
You can only order food at the self-pay kiosk that doesn’t check your barcode and there is generally no enforcement of memberships at the food court as no one has ever asked for my card.
Restricting the food court would generally require checking id cards at the exit and/or demanding a membership card at the self-pay kiosk or upon pickup of food. Nothing described in the article actually does this, so I’m not sure this is what’s being described.
Apparently there are some Costco’s on the West Coast or Southwest where the food courts are outside and don’t require a membership check, so my analysis might not apply to the different setups.
They had these out at the local Costco last night. Just a card scanner. Honestly, it wasn't that different from the "wave your card at the person in the front" system they had before -- it didn't slow things down much.
I have to assume that much like gyms they will have displays that will pop up the associated picture on file on entry. Not facial recognition, and it sounds like the person will still be standing there just like they do now and they can reference the picture match manually. In practice they seldom if never would, but it's a risk for people sharing cards.
As is the checkout person will essentially never deny someone based on a mismatch because it causes quite a logistic issue to deny someone who has a big cart of goods, most of which are sitting on the belt, then to suddenly refuse their service.
Nope, the scanners can be connected to a tablet, some locations have this already. I imagine though the larger problem in the SF location is non-cardholders walking in.
This is hugely presumptive and profoundly technically ignorant (are you actually in this industry?). When someone scans in the image can be displayed anywhere else. As infecto mentioned, a tablet for instance. Again, it's a risk for people using someone else's membership. Otherwise it's completely useless because we know they scan at checkout.
"And nope on your 2nd point"
Pointing out an exception is pretty ridiculous logic. I've never, in my life, seen someone's card denied at checkout. Ever. I guarantee I have been near hundreds of people using other people's cards. That it happened somewhere at sometime is pretty lazy contrarian nonsense. Further, I would wager that what you saw was actually someone who thought they could use a visa or didn't realize their membership expired -- where the cashier is left with zero options -- and not someone using someone else's membership.
Bruh, I saw someone's card denied last week. The couple right in front of me in line.
It was a busy saturday. 10th Street San Francisco
Someone (mananger?) came over and checked the card and then the manager and the cashier recarted everything on the conveyor. The manager took the cart.
Alcohol as well, non-members can go in at buy that too.
> "It helps speed up the process," Richard Galanti, Costco's former chief financial officer, told Axios in January.
> "When you go through checkout, particularly self-checkout, there's not someone there having to review the card again," Galanti said.
As far as I can tell, it's not going to prevent reviews at checkout (unless there are scanners there), not to mention the card still needs to be used to tie the purchases to the member... it's not like they are going to be like Amazon Go. Even if it does speed up checkout, it will just move the slowdown from checkout to store entry, so it doesn't seem like anything is actually being saved.
Nothing is being saved? Well from the store manager’s perspective, the only time being wasted now belongs to the customers, and isn’t any of his or his budget’s concern.
Couldn't the POS pull up your picture when they scan the card? No idea if they do or not but would make sense.
There definitely is savings but I think you are reading it the wrong way. The ultimate goal here is to prevent people from using someone else's card. Costco makes all their money from the annual membership dues. I suspect they have tested this and there is savings with doing proper checks at store entry and saving the hassle of carts full of goods when denied at checkout. Ultimately driving more memberships.
My picture is on my Costco card and I have to hand it to the cashier when I checkout. I’m not sure what scanning on entry does that would eliminate that step.
Again your thinking is backwards. It’s not about entirely eliminating secondary checks it’s about moving the primary check to store entry which I would guess increases the checks effectiveness and reduces the chance of rejecting sales at the register. And ultimately reducing those above costs and maybe driving more memberships.
At the San Francisco Costco, they don't let anyone in without a membership for any reason, at least without a huge argument. Food court? no. Have a gift card? no. Just buying liquor? no. Have an eye doctor appointment? no. I had to call the store, ask for manager, they then escorted me to the eye doctor where they watched me do the paperwork with the receptionist. Only then did they let off.
I've only been to Costco once here in the UK (as I'm not eligible for membership - the criteria are quite tight here), but they had a person and a scanner checking cards on the entrance.
Maybe that's because of the stricter eligibility rules.
Apparently, by targeting the Wholesale market - plus a limited range of general consumers, they are able to class their stores as wholesale warehouses, which can be opened in locations where a general retail store wouldn't be permitted. That makes purchasing or leasing land for the store much cheaper.
Oh wow, sounds like what the Makro used to to in Belgium for the longest time. You could only get in if you had a BTW number (think registered company, including self employed.).
Am I the only one that hates shopping at Costco? I'm 5 seconds away from cancelling it and joining the evil sam Walton empire because they have curbside pick up, scan and go, and store lay outs that rarely change.
Their stores are so damn frustrating and I hate spending whole afternoons shopping there.
Personally, I love Costco and find their product quality and employees to be better than Walmart / Sam's Club. The number of Costco members keeps increasing year over year so clearly they're doing something right [1].
After shopping at both, the quality difference is non-existent. The variety of products at Costco is better but my staples inside bulk meats, veg, and fruits and not housewares or dry goods so its a wash.
Scanning the card would allow them to monitor the frequency that any particular member goes to the store, and with data analysis they would be able to detect unusual patterns, such as the same member going in multiple times per day/week.
I know this is true but I find it so hard to believe. Are there really that many people out there not getting value out of their memberships? I saved enough money on tires compared to everywhere around me to cover multiple years of my membership fees. I guess the math just lines up in a way I don't understand.
Its simply that the inventory they sell is most likely priced in such a way that it covers the cost of the product and its existence inside of the warehouse. Costco has very aggressive vendor terms and they sell the inventory before they are having to pay the vendor for it.
Said another way, they break even or have slight margin on selling products, this includes the executive membership annual check.
I doubt there is very little cost to memberships for Costco. So it has extremely high margins.
Since the products that are being sold in Costco are close to wholesale they also carry a margin, just not as high. So even if 100% of the memberships were used, they would still make a nice tidy profit. Purely because the products literally pay for themselves. This is primarily due to how Costco has low costs to having little need for additional warehouses outside of their public warehouses. Their cost of goods sold vs revenue is about 87%. So about 13% profit. That is just the goods themselves.
So the more I think about this, there has to be some sort of cost to memberships. Especially for people arriving, because if there was no cost, why implement these scanners? While memberships help with profit, there is a huge cost to implementing something that could scare your customers away.
I also think the whole "makes a majority of their money" needs further explanation. The highest percentage of their profit is from the membership fees. The highest percentage of revenue is from the goods sold is my bet.
Typically closer to 89-90%. Costco generally makes a 10% project. Merchandise is practically break even and memberships is where all the money is coming from. Merchandise and sga together is 98%.
Circling back to the insight that costco is designed to make profit from its memberships and not its merchandise, though they are certainly making margin off selling items as well. That's why they go through phases of cracking down on memberships.
Even then they don't really examine the card. Most of the time I just flash my card for a brief second while I'm walking and the person at the door just nods and moves onto the next person behind me.
Great, let's just put membership data on an app and let NFC wave us through. Why are we carrying around these plastic cards? You either have to make it a daily carry in your wallet or risk leaving it at home.
They searched my bag one day when I was leaving. Said the small print in the membership agreement gave them the right to search without my consent. So I turned around went to the desk and cancelled the membership. Never going back. They can keep the $5 chicken
It’s completely fair to draw a line at not giving up consent to be searched and canceling a Costco membership that signs away those rights lines up with that.
The prices aren't that much better than Amazon. I'm not signing my basic rights away for a discount on a crate of noodles. It's offensive as well. When did it become Ok to presume your customer is a criminal? Sure if you have video feed of them stealing stop them. But "random" searches when they don't like the look of your face is crossing a line.
> Costco reserves the right to inspect any container, backpack, briefcase, or other bag, upon entering or leaving the warehouse and to refuse entry to anyone at our discretion.
Which makes me wonder, can I refuse a Walmart receipt check? I never agreed to their inspection.
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[ 3.7 ms ] story [ 164 ms ] threadHaving said that, this will probably piss me off. Why can’t the cashier do this and deny at the time of purchase.
Costco’s customer friendliness is why I shop there, and this is not customer friendly. Seems like a bean counter had a brilliant idea. /s
As for the customer friendliness of the proposed scanner, in my mind it depends on how quick and easy it is. If it's not too much of a slowdown relative to the current "flash my card at the staff person", then I don't think I'd mind it. However, if it starts causing lines to get in, yeah that's going to be a problem.
Additionally, I agree with the other commenter that, just from the details as provided, I don't even see how the proposal will solve the problem. A scanner will check that the card is a valid card, but unless it's paired with some kind of facial recognition, I'm not sure how it will prevent card sharing.
Of course your picture is on your card but I think we would all agree that a picture on a 3x2 credit card that can be B&W is inferior to the color picture displayed on an ipad. Having an associate look at a picture on the back of a credit card is slow.
It depends on store location but they have always had varying degrees of checking that you are the owner of the card. Costco makes a majority of their profit from Membership fees, hence the desire to enforce the long standing rule.
I ended up in a shouting match with the tire center manager who claimed I was in a "car accident", and thus my road hazard warranty was void after I took a nail on the freeway. I was not in a car accident, I would have known -- I was there.
30 minutes of my life I'll never get back grappling with him and the store manager -- for them to try saving a $90 pro-rata credit. My tire business has been pulled out of costco after like 25 years. It's getting tough to justify the rest of the membership. It's always a shopping hellscape there, and everyone is rude/grumpy.
No, your kids do not need to constantly be in the Costco.
Interestingly they had the same items except they had jalapenos instead of relish
You can only order food at the self-pay kiosk that doesn’t check your barcode and there is generally no enforcement of memberships at the food court as no one has ever asked for my card.
Restricting the food court would generally require checking id cards at the exit and/or demanding a membership card at the self-pay kiosk or upon pickup of food. Nothing described in the article actually does this, so I’m not sure this is what’s being described.
Apparently there are some Costco’s on the West Coast or Southwest where the food courts are outside and don’t require a membership check, so my analysis might not apply to the different setups.
As is the checkout person will essentially never deny someone based on a mismatch because it causes quite a logistic issue to deny someone who has a big cart of goods, most of which are sitting on the belt, then to suddenly refuse their service.
it's just a barcode reader. Nothing more.
And nope on your 2nd point - I've seen cashiers deny a purchase due to some membership problem, the cashier puts everything back in the cart
"it's just a barcode reader. Nothing more."
This is hugely presumptive and profoundly technically ignorant (are you actually in this industry?). When someone scans in the image can be displayed anywhere else. As infecto mentioned, a tablet for instance. Again, it's a risk for people using someone else's membership. Otherwise it's completely useless because we know they scan at checkout.
"And nope on your 2nd point"
Pointing out an exception is pretty ridiculous logic. I've never, in my life, seen someone's card denied at checkout. Ever. I guarantee I have been near hundreds of people using other people's cards. That it happened somewhere at sometime is pretty lazy contrarian nonsense. Further, I would wager that what you saw was actually someone who thought they could use a visa or didn't realize their membership expired -- where the cashier is left with zero options -- and not someone using someone else's membership.
It was a busy saturday. 10th Street San Francisco
Someone (mananger?) came over and checked the card and then the manager and the cashier recarted everything on the conveyor. The manager took the cart.
Additionally, anyone with a gift card is entitled to shop there without a membership.
I don’t see how the burden on cashiers is changed.
> "It helps speed up the process," Richard Galanti, Costco's former chief financial officer, told Axios in January.
> "When you go through checkout, particularly self-checkout, there's not someone there having to review the card again," Galanti said.
As far as I can tell, it's not going to prevent reviews at checkout (unless there are scanners there), not to mention the card still needs to be used to tie the purchases to the member... it's not like they are going to be like Amazon Go. Even if it does speed up checkout, it will just move the slowdown from checkout to store entry, so it doesn't seem like anything is actually being saved.
There definitely is savings but I think you are reading it the wrong way. The ultimate goal here is to prevent people from using someone else's card. Costco makes all their money from the annual membership dues. I suspect they have tested this and there is savings with doing proper checks at store entry and saving the hassle of carts full of goods when denied at checkout. Ultimately driving more memberships.
Absolutely has a strong chance of savings.
Maybe that's because of the stricter eligibility rules.
https://customercare.costco.co.uk/app/answers/detail/a_id/85...
Apparently, by targeting the Wholesale market - plus a limited range of general consumers, they are able to class their stores as wholesale warehouses, which can be opened in locations where a general retail store wouldn't be permitted. That makes purchasing or leasing land for the store much cheaper.
Looks like you need to be employed in certain sectors, or have your company hook you up. Sounds almost like a credit union.
But they stopped doing that ~10 years ago or so.
Their stores are so damn frustrating and I hate spending whole afternoons shopping there.
[1] https://www.contimod.com/costco-statistics/
Said another way, they break even or have slight margin on selling products, this includes the executive membership annual check.
The mark-up on products tends to be so big that it looks impossible to buy at Costco prices without costing them money.
Since the products that are being sold in Costco are close to wholesale they also carry a margin, just not as high. So even if 100% of the memberships were used, they would still make a nice tidy profit. Purely because the products literally pay for themselves. This is primarily due to how Costco has low costs to having little need for additional warehouses outside of their public warehouses. Their cost of goods sold vs revenue is about 87%. So about 13% profit. That is just the goods themselves.
So the more I think about this, there has to be some sort of cost to memberships. Especially for people arriving, because if there was no cost, why implement these scanners? While memberships help with profit, there is a huge cost to implementing something that could scare your customers away.
I also think the whole "makes a majority of their money" needs further explanation. The highest percentage of their profit is from the membership fees. The highest percentage of revenue is from the goods sold is my bet.
Circling back to the insight that costco is designed to make profit from its memberships and not its merchandise, though they are certainly making margin off selling items as well. That's why they go through phases of cracking down on memberships.
Doesn’t work at gas station though.
Or something like a hand-bag / purse / backpack?
> Costco reserves the right to inspect any container, backpack, briefcase, or other bag, upon entering or leaving the warehouse and to refuse entry to anyone at our discretion.
Which makes me wonder, can I refuse a Walmart receipt check? I never agreed to their inspection.