Costco cracking down on membership sharing

Costco is testing new technology that could lead to a crackdown on membership-sharing, or when people who haven't paid for an annual membership piggyback off of paying members' cards. 

Generally, Costco members need only flash their membership cards at employees to gain entry to the shopping club. Memberships are non-transferable, but households can receive one extra membership card. A basic membership costs $60 annually, while the executive membership, which has perks like a 2% cash-back reward, is $120 per year.

Now, Costco is testing a strategy that could combat membership sharing: It is asking shoppers to scan their membership cards at stores' entrances. The wholesale club's latest move comes as the chain has introduced self-checkout registers, which have made it easier for these sorts of shoppers to slip through the cracks. 

"A few Costco locations are scanning Costco membership cards at the entrance. This test is to match members to their cards at the door prior to shopping for an improved member experience," a Costco spokesperson said in a statement to CBS MoneyWatch.

Over the summer, Costco started asking shoppers to present photo identification along with their physical membership cards at self-checkout registers, like they're asked to do in regular checkout lanes administered by workers. 

"We don't feel it's right that non-members receive the same benefits and pricing as our members," Costco said when it announced the change. 

A shopper who said they were at a store in Issaquah, Washington, where the company is headquartered, posted photos of the system in action on Reddit. 

A sign on the scanner reads, "You will be asked to scan your membership card before entering the warehouse" as a store worker oversees the process.  

Costco operates 871 warehouses, including 600 in the United States.

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Megan Cerullo

Megan Cerullo is a New York-based reporter for CBS MoneyWatch covering small business, workplace, health care, consumer spending and personal finance topics. She regularly appears on CBS News Streaming to discuss her reporting.