Costco cracking down on card sharing

[Brian Lutz]

In some Costco locations it seems that in an effort to prevent people from using borrowed Costco cards to shop they are either checking faces against the photos on membership cards or requiring other ID if the card has no photo (they stopped taking photos for a while during COVID). This seems to be limited mostly to the self checkout lanes so far, but there are reports of this on regular lanes as well. One person reported being told that the checks are in response to TikTok "influencers" encouraging people to use borrowed cards in the self checkout lanes.

[Alpha8472]

I do remember during summer of 2020 that they had resumed taking Costco card photos.

The problem is that checking other ID cards is time consuming. Perhaps they should try something else such as requiring a PIN to use the Costco membership card at the checkout. Target requires a PIN to use its store credit card.

[storewanderer]

Given the importance of membership revenue to Costco this is a pretty important issue from a revenue protection standpoint. However they need to figure out a way to do this that is less intrusive to the customer given that probably 98% of the customers going through self checkout are not trying to use someone else's membership card.

Sam's Club has this quite loose or so it appears but it was pointed out here they do some kind of a system check with the payment card to the membership card name and may flag certain transactions on self checkout.

[mbz321]

Given the importance of membership revenue to Costco this is a pretty important issue from a revenue protection standpoint. However they need to figure out a way to do this that is less intrusive to the customer given that probably 98% of the customers going through self checkout are not trying to use someone else's membership card.

Sam's Club has this quite loose or so it appears but it was pointed out here they do some kind of a system check with the payment card to the membership card name and may flag certain transactions on self checkout.

As a Costco employee, the 'self' checkouts should really just be removed already, IMO. They never made sense from the get-go and now they are biting us in the a$$ more than they did before (the majority of unscanned items caught at the door are always from the SCOs, but surely some people are getting out with unpaid product). The machines themselves are just not designed for the type of business we do, especially when we aren't going to trust members to use the scan guns, and corporate has refused to set an item limit, so people come through with loaded carts (although the membership card checks are slightly alleviating that problem).

So now we are paying another person to stand in front of the line and check membership cards when they would be much better utilized cashiering at a regular lane.

And this whole enforcement makes no sense either, as if we catch someone, we send them up to a supervisor and let them shop under a '99' (our code for a generic account) and give them a silly letter that the non-member is supposed to give to the member explaining policy We don't log the membership number or flag the account or anything. (There is a date after the summertime where supposedly we won't be ringing anyone up that isn't a member, but until that time they could theoretically continue to do it, as good luck remembering everyone's name and face!) There is also a promotion if they do sign up for a $60 membership and link a credit card for automatic renewal, they'll get $30 back in a gift card, but it is being poorly explained, if at all. It also doesn't help that in my location, we have a lot of shoppers of Russian and Ukranian descent and other nationalities which leads to a huge communication problem.

Using a PIN wouldn't really solve the problem as they'll just share that too. The digital membership card is a step in the right direction as it can't be shared as easily (many trying to game the system just have just been using a picture of a barcode from a physical membership card). Now if the cards were read by swiping the magstripe like they are at the gas station vs. the barcode, that would cut that back, but probably not worth implementing such a dated technology at this point. Fingerprint scans would be great, but could you imagine the outrage?? s

I think a better way would be to do better checks at the front door (instead of just flashing a card real quick) by having two+ people and an amusement park style of entry, but then that might only cause lines to get in and have something else for people to complain about!


Sam's and BJ's really don't seem to care anymore. No pictures on cards, I don't even think the Sam's cards have names on them. But they clearly aren't making or trying to make money on memberships themselves.

[storewanderer]

As a Costco employee, the 'self' checkouts should really just be removed already, IMO. They never made sense from the get-go and now they are biting us in the a$$ more than they did before (the majority of unscanned items caught at the door are always from the SCOs, but surely some people are getting out with unpaid product). The machines themselves are just not designed for the type of business we do, especially when we aren't going to trust members to use the scan guns, and corporate has refused to set an item limit, so people come through with loaded carts (although the membership card checks are slightly alleviating that problem).

So now we are paying another person to stand in front of the line and check membership cards when they would be much better utilized cashiering at a regular lane.

And this whole enforcement makes no sense either, as if we catch someone, we send them up to a supervisor and let them shop under a '99' (our code for a generic account) and give them a silly letter that the non-member is supposed to give to the member explaining policy

Using a PIN wouldn't really solve the problem as they'll just share that too.

I think a better way would be to do better checks at the front door (instead of just flashing a card real quick) by having two+ people and an amusement park style of entry, but then that might only cause lines to get in and have something else for people to complain about!


Sam's and BJ's really don't seem to care anymore. No pictures on cards, I don't even think the Sam's cards have names on them.

It makes a lot more sense to do this verification at the door because if you do the verification at the door, you save the hassle of someone shopping then getting turned away and the waste of time of multiple people on the front end dealing with the issue (at entry it stops with the door person rejecting entry). And if you try to "punish" the person sharing the membership somehow as they are technically violating membership terms (fine them or something) then you'd lose customers from that.

I don't really understand why Costco felt the need to install self checkout. Their process is already very efficient on the front end. There was no logical reason for self checkout unless they did something like put a 5 item limit on it, and how many people go into Costco to buy less than 5 items? Not enough to make it worth doing anything special for them.

Sam's Club has implemented self checkout to the point that more transactions go through self checkout than regular checkout. I am not sure why Costco can't just get a system like Sam's Club has if they are so dead set they need to offer self checkout. The check is the door person at Sam's Club basically re-scans everything but I don't find the exit process at Sam's Club to be any less efficient than the process at Costco.

I find Sam's pricing creeping up, Costco is cheaper on various grocery items/perishables, for now. I think this is a direct result of the free/discounted memberships.

[babs]

From what someone told me the issue is that Costco credit cards are being stolen and used by crooks to buy stuff through self checkout and then they return the items for cash.

[storewanderer]

From what someone told me the issue is that Costco credit cards are being stolen and used by crooks to buy stuff through self checkout and then they return the items for cash.

How are people getting cash refunds from Costco if the purchase cannot be linked to their card/membership?

Are you saying it goes like this:
A goes to Costco and buys a $100 item with no serial number attached to it, with their own credit card/Costco card/cash and gets a receipt.
A then goes back to Costco at self checkout using a stolen credit card and buys a second of the same $100 item, tosses the receipt since they don't care about it, and now has 2 of the item but technically only paid for one item.
A then goes back to Costco and gives the receipt from their own credit card purchase and returns the item purchased in transaction 2 and gets a refund to their own credit card so they basically pay for zero items?

And we wonder why retailers want to use facial recognition technology so badly...


I guess Costco could try going to a "return barcode" thing on high ticket items (what a disaster in my opinion) the way Macy's Stores do in some regions on all items and all Dillard's do but then the barcode could just be peeled between the two items I guess.

[mbz321]

From what someone told me the issue is that Costco credit cards are being stolen and used by crooks to buy stuff through self checkout and then they return the items for cash.

That's news to me!

[Romr123]

I don't know how you do the barrier at the door, as several departments (liquor, pharmacy, hearing aids, optical) are required to accept all comers due to the regulated nature of those businesses.

[BillyGr]

I don't know how you do the barrier at the door, as several departments (liquor, pharmacy, hearing aids, optical) are required to accept all comers due to the regulated nature of those businesses.

Maybe create some type of free "generic" card that will only allow purchases from those departments? Thus, they can still come in, but can't buy anything else.

Or just make those things accessible separately - that already happens with liquor here in NY (at least in BJ's, we don't yet have a Costco locally), due to state laws on sales of that (supermarkets are not allowed to sell wine or liquor, just beer and similar stuff). Thus, the liquor store is separated to one side of the main entry, and anyone could go in there without entering the main store.

Could probably do similarly for all those departments, even having them be an "island" with counters on two sides, one for members facing into the store, one for nonmembers facing the outer wall.