Costco CEO since 2012 steps aside

[ClownLoach]

I think Costco really left a bad taste in people's mouth with the card sharing harassment and how they went about it.

People are struggling with the inflation that has occurred on various products and services and health insurance and auto insurance providers have pushed 15-25% increases out in recent months or will be rolling such increases out 1/1/2024 so it is going to get even worse soon here.

A lot of businesses have been trying to operate on installment/membership models and I think there is a segment of consumers who are struggling who have gotten the bright idea to "cut installment/memberships they don't really need" so things like the monthly car wash membership, that fitness membership you rarely or ever use, get cut. Then the next month comes and as everything keeps increasing in cost you keep thinking of what else to cut. That Costco membership just so happens to be coming due again and you start to think gosh every time I go shop there I spend $200 or $300 and now they want $60 for a membership renewal you know what I am going to just not renew that membership.

Costco can be a major cash cow in the US on an ongoing basis but I think the major growth era may be over for them in the US.

They probably need to adjust some of their perishable merchandise to some smaller sizes (Sam's has done a lot of this) because consumers are also becoming much more concerned about waste and what I have learned with dedicated Costco grocery shoppers is they throw away a LOT of food. They think they are getting some screaming deal at Costco but they throw so much away they'd be better off ad shopping at other grocers and just buying what they need.

You might have read the same article that I read about this Membership Fee thing.

It discussed how many Americans are over burdened with all these Fees they are paying to glean discounts and perks via membership. It also discussed food waste in relation to large sized product purchases.

Only thing is with executive and the credit card I haven't paid for membership in 8 years. I always get between $500 and last year was a record at $1200 back between both. Just gas cash back alone pays for the membership even if you didn't buy anything else and that's before the price difference (best quality fuel because of their relentless pump filter cleaning and it's Chevron gas, fastest pumps by far completely cancel out any wait time and all my local stores have between 30 and 32 pumps now). Their regular customers are not paying for membership after the executive cash back. Almost makes me wonder if they'd be happier to only offer executive.

Supposedly they're getting a new touchscreen POS that will display the picture of the member "very large" so that's why they're turning the heat back up on the membership thing. They're also trying to move to a digital only membership card with changing QR code so a screen shot won't work and it has some kind of token that won't allow you to share your username and password, if you are detected using it on multiple devices by IMEI number it will be locked and you'll have to go to membership counter to reset it. Lots of technology coming to Costco, but none that I see as a customer benefit (like Sam's Scan and Go, or even their internal company app "Ask Sam" which is basically an AI powered employee search engine and they help customers with it now).

[storewanderer]

Only thing is with executive and the credit card I haven't paid for membership in 8 years. I always get between $500 and last year was a record at $1200 back between both. Just gas cash back alone pays for the membership even if you didn't buy anything else and that's before the price difference (best quality fuel because of their relentless pump filter cleaning and it's Chevron gas, fastest pumps by far completely cancel out any wait time and all my local stores have between 30 and 32 pumps now). Their regular customers are not paying for membership after the executive cash back. Almost makes me wonder if they'd be happier to only offer executive.

Supposedly they're getting a new touchscreen POS that will display the picture of the member "very large" so that's why they're turning the heat back up on the membership thing. They're also trying to move to a digital only membership card with changing QR code so a screen shot won't work and it has some kind of token that won't allow you to share your username and password, if you are detected using it on multiple devices by IMEI number it will be locked and you'll have to go to membership counter to reset it. Lots of technology coming to Costco, but none that I see as a customer benefit (like Sam's Scan and Go, or even their internal company app "Ask Sam" which is basically an AI powered employee search engine and they help customers with it now).

I am wondering if retailers who get overly reliant on customers with credit cards end up in some kind of a bad trap. This feels a little like the department store industry who was so reliant on credit cards over the years. I get that this Costco credit card/Citi Visa is better than anything the department stores ever came out with perhaps (though the old Sears Mastercard- not the Shop Your Way Mastercard- also through Citi this this day continues to have very fantastic buy x get y statement credit offers by category type monthly- this may be the best credit card that exists but I don't think it is open to new issue anymore- there is an ongoing thread over at Flyertalk about this card).

Really I think if they are having such issues with membership, sharing, whatever they should just increase their prices to make up for whatever losses they perceive to be having. I think Sam's has done some of this to make up for all of its membership related promotions.

I am not sure what percentage of their customer base is going to be on board with a digital only membership card. Phone reception isn't always the best in Costco either, I always figured the issue was so many people around. Even if only 10% of the customers don't want it, that is going to be a problem.

[Romr123]

Day they require me to use my phone to access Costco is the last day I'll darken their doors...after the shenanigans Target pulled several years ago using Bluetooth/wifi beacons to adjust Target.com pricing was the last time I trusted in-store retailers with use of my phone in-store.

[BillyGr]

I am not sure what percentage of their customer base is going to be on board with a digital only membership card. Phone reception isn't always the best in Costco either, I always figured the issue was so many people around. Even if only 10% of the customers don't want it, that is going to be a problem.

Not to mention that there are always people who simply can't use such - still not a requirement for anyone to carry any device, much less a particular one that can be used the way they want to. They could possibly say it is the way for someone joining new, but if someone has already paid for a membership and then is unable to use it due to such a change, that would be a problem as they have taken money then fail to provide what was paid for.

[storewanderer]

I am not sure what percentage of their customer base is going to be on board with a digital only membership card. Phone reception isn't always the best in Costco either, I always figured the issue was so many people around. Even if only 10% of the customers don't want it, that is going to be a problem.

Not to mention that there are always people who simply can't use such - still not a requirement for anyone to carry any device, much less a particular one that can be used the way they want to. They could possibly say it is the way for someone joining new, but if someone has already paid for a membership and then is unable to use it due to such a change, that would be a problem as they have taken money then fail to provide what was paid for.

They could treat those customers the same way they treat a customer who skips out on the exit receipt check- refund their membership and tell them not to return to the store.

If the "membership" model is this big of a deal and causing such enforcement issues, just increase the prices a few cents and open it up to everyone.

[Super S]

Day they require me to use my phone to access Costco is the last day I'll darken their doors...after the shenanigans Target pulled several years ago using Bluetooth/wifi beacons to adjust Target.com pricing was the last time I trusted in-store retailers with use of my phone in-store.

I am not sure what percentage of their customer base is going to be on board with a digital only membership card. Phone reception isn't always the best in Costco either, I always figured the issue was so many people around. Even if only 10% of the customers don't want it, that is going to be a problem.

Not to mention that there are always people who simply can't use such - still not a requirement for anyone to carry any device, much less a particular one that can be used the way they want to. They could possibly say it is the way for someone joining new, but if someone has already paid for a membership and then is unable to use it due to such a change, that would be a problem as they have taken money then fail to provide what was paid for.

They could treat those customers the same way they treat a customer who skips out on the exit receipt check- refund their membership and tell them not to return to the store.

If the "membership" model is this big of a deal and causing such enforcement issues, just increase the prices a few cents and open it up to everyone.

There is a simple solution here. Put a card reader by the door so that the existing membership cards can be scanned at entry.

I am not going to rely on my phone just to shop at Costco. Not everybody is willing to spend hundreds of dollars on the latest and greatest phone technology, there are still some of us who don't rely on their phones for every aspect of their lives, and there are times when I don't even take my phone when shopping. If Costco requires you to display a membership with your phone, I am done.

[mbz321]

Supposedly they're getting a new touchscreen POS that will display the picture of the member "very large" so that's why they're turning the heat back up on the membership thing. They're also trying to move to a digital only membership card with changing QR code so a screen shot won't work and it has some kind of token that won't allow you to share your username and password, if you are detected using it on multiple devices by IMEI number it will be locked and you'll have to go to membership counter to reset it. Lots of technology coming to Costco, but none that I see as a customer benefit (like Sam's Scan and Go, or even their internal company app "Ask Sam" which is basically an AI powered employee search engine and they help customers with it now).

I have heard nothing of this sort. Digital Membership cards are an option right now, but you can still get a physical card (and given the demographics of many of our members at least in my area, many can barely use the credit card reader let alone an App ) The digital membership card system is also very buggy and the QR codes don't always refresh as they should. I get several a day where I scan the code and up pops an Invalid membership card and then i sheepishly have to ask the member to touch any button on the screen so I can see it isn't a screenshot, then manually key in the membership number (otherwise they have to sign out and back in which takes forever).

Now I did see a picture online of a Costco (I'm thinking it was in the UK, but possibly France. It definitely was not in the U.S.), where they had a screen by the entrance and members would have to swipe upon entry. I don't know why they don't expand it other than the fact that you will then cause a backup at the entrance door and would require more staffing around there. '
I would love to see a new POS system where I could see member information, look up items, etc. right from the register, but I don't see that happening any time soon.

Also, due to lack of staffing, we have pretty much given up card checking at the Self Checkout but we still catch plenty daily in the regular lines that think they have the right to use a family members' card.

[ClownLoach]

Supposedly they're getting a new touchscreen POS that will display the picture of the member "very large" so that's why they're turning the heat back up on the membership thing. They're also trying to move to a digital only membership card with changing QR code so a screen shot won't work and it has some kind of token that won't allow you to share your username and password, if you are detected using it on multiple devices by IMEI number it will be locked and you'll have to go to membership counter to reset it. Lots of technology coming to Costco, but none that I see as a customer benefit (like Sam's Scan and Go, or even their internal company app "Ask Sam" which is basically an AI powered employee search engine and they help customers with it now).

I have heard nothing of this sort. Digital Membership cards are an option right now, but you can still get a physical card (and given the demographics of many of our members at least in my area, many can barely use the credit card reader let alone an App ) The digital membership card system is also very buggy and the QR codes don't always refresh as they should. I get several a day where I scan the code and up pops an Invalid membership card and then i sheepishly have to ask the member to touch any button on the screen so I can see it isn't a screenshot, then manually key in the membership number (otherwise they have to sign out and back in which takes forever).

Now I did see a picture online of a Costco (I'm thinking it was in the UK, but possibly France. It definitely was not in the U.S.), where they had a screen by the entrance and members would have to swipe upon entry. I don't know why they don't expand it other than the fact that you will then cause a backup at the entrance door and would require more staffing around there. '
I would love to see a new POS system where I could see member information, look up items, etc. right from the register, but I don't see that happening any time soon.

Also, due to lack of staffing, we have pretty much given up card checking at the Self Checkout but we still catch plenty daily in the regular lines that think they have the right to use a family members' card.

All the Costco stores I shop in the San Diego division are already 100% touchscreen for returns and the POS looks like it saves them an incredible amount of time. They just scan the membership card and either enter the SKU or scan it and it shows them all the purchases of that item including older ones and they select which one to return on the touch screen by checking the "checkmark box." There is the exact big box I've described in the upper right corner for the member name and photo but it's currently blank. I've only seen one time recently where they had to check the AS/400 database, it got everything else each time.

The App was locked to a single phone IMEI on Android when the mobile membership came out but they pulled that back shortly after. I had trouble because I changed my phone twice due to defects and was locked out so wound up having to talk to customer service and they asked if I was sharing username and password and I said no, explained the multiple phone swaps and they unlocked the membership in the app but explained what was going to happen where in the future it would have to be reactivated in the store. Since then as I said the IMEI lock seems to have been turned off, probably because of improvements in phone security permissions where many people would just select "no" but why not turn that option back on later to secure these digital accounts, great way to solve for what could easily become a worse problem than card sharing... Password sharing like what Netflix and others are cracking down on.

As you mentioned they are already using stricter technologies in new countries they enter, such as France which opened with access control gates and scanning cards. Only a matter of time I think before they come up with something for the rest of the world. Biggest problem I see is that the psychology of the matter in the US is that security is bad, which is why stores removed turnstiles and the gates at Amazon Fresh were determined to be such a problem. Everywhere else around the world I go there is access control like gates and turnstiles and such at retail stores, and with the US shrink problems it's only a matter of time before they have to do it for real (and not with the chintzy squawking gates Walmart tried and removed).

Just because you're not aware of anything changing with cards and such doesn't mean it isn't happening. There is a industry wide push for barcode elimination on anything related to memberships, payment types etc. because they're not secure and easily replicated for cheating purposes. I still can't believe membership numbers are printed on receipts because anyone can take a receipt off the ground and make up their own fake membership card from it. No reason not to since the crooks there days make fake credit cards so well, and you could easily cheat the self checkout with a photoshopped screen shot where you changed the QR code for the regular barcode and put your picture there. Nobody at Costco would catch that, and I'll bet it's already happening every day. For those who don't want a digital membership I am sure that they could easily use other technologies such as what they're already doing at the gas pump where the "chip" on the Costco credit card is used for membership validation, or the "tap" functions. Instead of a static barcode that is super easy to cheat, using the chip or tap at the register to "scan" membership coupled with the stored digital photo would secure the physical cards.

[storewanderer]

Costco could easily truncate the membership numbers on the receipts. Even Kroger, CVS, etc. does that when you scan a loyalty card.

Costco quite recently replaced the registers in a lot of stores so it will be interesting if they actually replace them all again. Their old keyboard set up has been deemed significantly more efficient with their experienced/well-trained cashiers than the touchscreen nightmare that is "easier" for less trained employees to use but interfaces slower and just seems clumsy. That touchscreen Toshiba interface is being pushed on the grocery stores who have stuck to traditional old keyboard set up like Costco and they already got Safeway/Kroger to make the switch fully chainwide though Kroger was very slow again due to the efficiency studies favoring the old keyboard like Costco, that touchscreen Toshiba interface is also used at Michaels, was used at Bed Bath and Beyond, is somewhat similar but not identical to CVS's interface also.

[mjhale]

Just because you're not aware of anything changing with cards and such doesn't mean it isn't happening. There is a industry wide push for barcode elimination on anything related to memberships, payment types etc. because they're not secure and easily replicated for cheating purposes. I still can't believe membership numbers are printed on receipts because anyone can take a receipt off the ground and make up their own fake membership card from it. No reason not to since the crooks there days make fake credit cards so well, and you could easily cheat the self checkout with a photoshopped screen shot where you changed the QR code for the regular barcode and put your picture there. Nobody at Costco would catch that, and I'll bet it's already happening every day. For those who don't want a digital membership I am sure that they could easily use other technologies such as what they're already doing at the gas pump where the "chip" on the Costco credit card is used for membership validation, or the "tap" functions. Instead of a static barcode that is super easy to cheat, using the chip or tap at the register to "scan" membership coupled with the stored digital photo would secure the physical cards.

Would it be reasonable to implement an RFID/tap type card like what hotels use for room keys in lieu of a digital ID card? I would like to think that Costco realizes that not everyone has a Smartphone. Also, with the potential for technology flubs, I think it would helpful to have a backup option. I stay at Hilton properties a lot and really like using the digital key system. However, there are some specific hotels in the Hilton chain that I frequent that the digital key doesn't work well at or doesn't work on certain doors despite notifying management at those locations. I've also had the situation where I have the digital key to skip the front desk and can't get in the side door of the hotel in question at all. The front desk can always issue a physical key once they verify you. Perhaps Costco could offer physical membership cards with something like RFID/tap to those without Smartphones or to members that request one.