Costco CEO since 2012 steps aside

[mbz321]

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 certainly hope some changes come about, but Costco up until this point seems to invest as little as possible when it comes to IT. (From what I hear, they have a lot of trouble attracting talent in Issaquah due to compensation being relatively low compared to other area companies) Any big changes made in the last few years seem half-assed and untested before being rolled out en masse. Hell, just recently they enabled the QR scanners at the gas pumps, despite the scanners being installed many years ago (and while I have not tested it, I've heard just a screenshot of a QR code, even an old one, will activate the pump). There is a lot of things the 'industry' does that Costco simply brushes off (for better or for worse).

That being said, the competition being Sam's and BJ's, aren't any better. Both simply just use a barcode for membership and have stopped putting pictures on cards.

[ClownLoach]

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 certainly hope some changes come about, but Costco up until this point seems to invest as little as possible when it comes to IT. (From what I hear, they have a lot of trouble attracting talent in Issaquah due to compensation being relatively low compared to other area companies) Any big changes made in the last few years seem half-assed and untested before being rolled out en masse. Hell, just recently they enabled the QR scanners at the gas pumps, despite the scanners being installed many years ago (and while I have not tested it, I've heard just a screenshot of a QR code, even an old one, will activate the pump). There is a lot of things the 'industry' does that Costco simply brushes off (for better or for worse).

That being said, the competition being Sam's and BJ's, aren't any better. Both simply just use a barcode for membership and have stopped putting pictures on cards.

The revenue models for Sam's and BJ's are different. I don't think I've used a full service checkstand at Sam's in many years but they used to have the customer swipe their card, not scan it. Obviously if Sam's has expanded their membership by nearly 50% in a 5 year period after closing almost a hundred locations they must not be needing to nickel and dime the membership piece. Because of the Scan and Go part of the app with your credit card in it you aren't too likely to see the username and password sharing happen there.

If the gas pump works with a screenshot, and the customer has a digital payment attached, then they are potentially going to find that whoever they shared that QR code with is going to run up their credit card since it becomes the default on the pump. Good luck disputing the charge if you shared the QR code.

Obviously Costco has learned that there is a real threat to their business from membership sharing, since most of their profit is from memberships, and they're going to do everything in their power to fix it. They reinvest everything else they make in the business so I'm still puzzled about the argument they don't spend. What they are decidedly against are the profit-sapping e-commerce concepts Wall Street pushes so hard that are completely unprofitable and just transfer the same customer from the retail bucket where they make money off them, to the e-commerce bucket where they buy less due to no impulse purchases and cost a crap ton more. Costco actually has the guts to stand up to Wall Street and say no to this nonsense.

If you really think they're not all over the security risk of the barcodes then you're actually accusing them of improper IT security management, which is a really serious accusation since they certify substantially complying with industry standards each quarterly earnings report. I appreciate skeptical perspectives but you have to realize that certain types of issues are not going to be ignored because they simply can't be. If Costco experienced substantial losses that had to be disclosed and they were from deviating from what are known as industry standard security protocols and directives, then you're talking about the entire C-suite potentially losing their jobs and perhaps those who signed the reports going to jail. They are most definitely going to be developing something that isn't a standard barcode because they must come up with a better solution. Barcodes aren't secure anymore for unique identifiers.

[storewanderer]

I've used the full service checkstand at Sams a few times lately and the cashier scans the membership card.

At the self checkout I always swipe it for some reason, never tried to scan it.

I feel like most of what Costco does is trying to save money. They want to run as efficient and as tight of a ship as possible.

[ClownLoach]

I've used the full service checkstand at Sams a few times lately and the cashier scans the membership card.

At the self checkout I always swipe it for some reason, never tried to scan it.

I feel like most of what Costco does is trying to save money. They want to run as efficient and as tight of a ship as possible.

I was wondering about that since they changed the PIN pads. With Scan and Go I have not had any need to use a full service checkout.

I agree on the Costco piece. It's clear that they aren't interested in doing much from a customer perspective lately, from the horrible lighting removals/skylight covering to the reduced payroll levels to the aggressive membership patrols.

[storewanderer]

I've used the full service checkstand at Sams a few times lately and the cashier scans the membership card.

At the self checkout I always swipe it for some reason, never tried to scan it.

I feel like most of what Costco does is trying to save money. They want to run as efficient and as tight of a ship as possible.

I was wondering about that since they changed the PIN pads. With Scan and Go I have not had any need to use a full service checkout.

I agree on the Costco piece. It's clear that they aren't interested in doing much from a customer perspective lately, from the horrible lighting removals/skylight covering to the reduced payroll levels to the aggressive membership patrols.

The self checkouts in my area have the old pinpads and the regular registers have the new pinpads. It is somewhat strange. I never used to have to wait for self checkout but the past year there is usually a short wait. It goes pretty fast since everything is bar-coded and most customers just scan from within the cart. It may be the easiest to use self checkout I've seen due to these factors, plus a fool proof user interface.

I'm wondering what percentage of transactions at Sam's are Scan and Go. I think it may be 20%+, and growing. This program seems very successful. They probably need to add additional exit staff; Reno never has more than one employee at exit. The ones in Sacramento that are I guess still a lot busier (though Reno is far busier than it used to be) have 2-3 employees at exit.

[ClownLoach]

I've used the full service checkstand at Sams a few times lately and the cashier scans the membership card.

At the self checkout I always swipe it for some reason, never tried to scan it.

I feel like most of what Costco does is trying to save money. They want to run as efficient and as tight of a ship as possible.

I was wondering about that since they changed the PIN pads. With Scan and Go I have not had any need to use a full service checkout.

I agree on the Costco piece. It's clear that they aren't interested in doing much from a customer perspective lately, from the horrible lighting removals/skylight covering to the reduced payroll levels to the aggressive membership patrols.

The self checkouts in my area have the old pinpads and the regular registers have the new pinpads. It is somewhat strange. I never used to have to wait for self checkout but the past year there is usually a short wait. It goes pretty fast since everything is bar-coded and most customers just scan from within the cart. It may be the easiest to use self checkout I've seen due to these factors, plus a fool proof user interface.

I'm wondering what percentage of transactions at Sam's are Scan and Go. I think it may be 20%+, and growing. This program seems very successful. They probably need to add additional exit staff; Reno never has more than one employee at exit. The ones in Sacramento that are I guess still a lot busier (though Reno is far busier than it used to be) have 2-3 employees at exit.

Those old Ingenico pin pads are now the top target for skimmers. Walmart stores all over SoCal had them on checkstands. Now they switched to the new Ingenico model and Walmart has installed a large metal yellow bracket with their logo laser cut out to prevent attachment of a skimmer.

Very rarely do I see only one person at exit at Sam's and usually they're running right back after helping a customer or some such issue. Same for Costco who now is much more thorough and does everything manually - they need to implement receipt scanning and item scanning with portable devices fast.

I think Scan and Go adoption is demographic based. In areas where there is a higher usage of cash it does not do well. I'd say less than 10% usage at the wildly busy store in Torrance that I believe is a converted Costco (the actual Costco is next door and on its 3rd building now, the 2nd which wasn't even old is now an Amazon hub). At the same time, higher income and technologically inclined customers are probably equally likely to use self checkout, scan and go, or curbside pickup - so where they win is that there are enough customers using these self service options to completely offset the labor for the curbside orders. My area is like that and I estimate the Scan and Go to be approaching 40% of the transactions. If alcohol was allowed it would be higher, but I don't think they've researched workarounds unlike Amazon Fresh who obviously is all self checkout via Just Walk Out and allows liquor purchases using that tech despite the law.

I think Sam's runs like Walmart on the payroll piece and just gives them the same labor regardless of how the customer pays, so where they run into issues are markets with what I call the self-righteous customer who loves to use curbside pickup but refuses to use self checkout or Scan & Go and whines that they don't like to see self checkout machines even though nobody is making them use one.

[storewanderer]

I was wondering about that since they changed the PIN pads. With Scan and Go I have not had any need to use a full service checkout.

I agree on the Costco piece. It's clear that they aren't interested in doing much from a customer perspective lately, from the horrible lighting removals/skylight covering to the reduced payroll levels to the aggressive membership patrols.

The self checkouts in my area have the old pinpads and the regular registers have the new pinpads. It is somewhat strange. I never used to have to wait for self checkout but the past year there is usually a short wait. It goes pretty fast since everything is bar-coded and most customers just scan from within the cart. It may be the easiest to use self checkout I've seen due to these factors, plus a fool proof user interface.

I'm wondering what percentage of transactions at Sam's are Scan and Go. I think it may be 20%+, and growing. This program seems very successful. They probably need to add additional exit staff; Reno never has more than one employee at exit. The ones in Sacramento that are I guess still a lot busier (though Reno is far busier than it used to be) have 2-3 employees at exit.

Those old Ingenico pin pads are now the top target for skimmers. Walmart stores all over SoCal had them on checkstands. Now they switched to the new Ingenico model and Walmart has installed a large metal yellow bracket with their logo laser cut out to prevent attachment of a skimmer.

Very rarely do I see only one person at exit at Sam's and usually they're running right back after helping a customer or some such issue. Same for Costco who now is much more thorough and does everything manually - they need to implement receipt scanning and item scanning with portable devices fast.

All of the Wal Marts have flipped self checkout to the new pinpads (with the software update), but some still have the old pinpads on some of the registers. Some have Verifone pinpads on some of the registers too but that is somewhat rare.

I've never seen just one employee at a Costco exit; always at least two employees. One employee has been standard with the Reno Sam's pretty much forever.

One Grocery Outlet I go to (still has the older Verifone pinpads) took a hot glue gun and made big huge inch tall lumps on top of the pinpads (to prevent skimmers). Some others have done cute things like put a label on the pinpads that says "thank you" or "have a nice day." Anyone who is swiping a card at this point should figure out a way to avoid swiping a card if at all possible. In my area most 7-Eleven stations gas pumps are still swipe card with old never replaced swipe equipment from 20 years ago... supposedly checked daily for skimmers.

Have you noticed the new Verifone pinpad at Rite Aid and at the post office (also some Petsmarts)? It looks like there is a camera sticking up out of it so if someone tried to put a skimmer on it the pinpad would be recording them.

[ClownLoach]

The self checkouts in my area have the old pinpads and the regular registers have the new pinpads. It is somewhat strange. I never used to have to wait for self checkout but the past year there is usually a short wait. It goes pretty fast since everything is bar-coded and most customers just scan from within the cart. It may be the easiest to use self checkout I've seen due to these factors, plus a fool proof user interface.

I'm wondering what percentage of transactions at Sam's are Scan and Go. I think it may be 20%+, and growing. This program seems very successful. They probably need to add additional exit staff; Reno never has more than one employee at exit. The ones in Sacramento that are I guess still a lot busier (though Reno is far busier than it used to be) have 2-3 employees at exit.

Those old Ingenico pin pads are now the top target for skimmers. Walmart stores all over SoCal had them on checkstands. Now they switched to the new Ingenico model and Walmart has installed a large metal yellow bracket with their logo laser cut out to prevent attachment of a skimmer.

Very rarely do I see only one person at exit at Sam's and usually they're running right back after helping a customer or some such issue. Same for Costco who now is much more thorough and does everything manually - they need to implement receipt scanning and item scanning with portable devices fast.

All of the Wal Marts have flipped self checkout to the new pinpads (with the software update), but some still have the old pinpads on some of the registers. Some have Verifone pinpads on some of the registers too but that is somewhat rare.

I've never seen just one employee at a Costco exit; always at least two employees. One employee has been standard with the Reno Sam's pretty much forever.

One Grocery Outlet I go to (still has the older Verifone pinpads) took a hot glue gun and made big huge inch tall lumps on top of the pinpads (to prevent skimmers). Some others have done cute things like put a label on the pinpads that says "thank you" or "have a nice day." Anyone who is swiping a card at this point should figure out a way to avoid swiping a card if at all possible. In my area most 7-Eleven stations gas pumps are still swipe card with old never replaced swipe equipment from 20 years ago... supposedly checked daily for skimmers.

Have you noticed the new Verifone pinpad at Rite Aid and at the post office (also some Petsmarts)? It looks like there is a camera sticking up out of it so if someone tried to put a skimmer on it the pinpad would be recording them.

Unfortunately the camera on the new Verifone is a QR code reader.

I guess the skimmers are designed to interfere with the chip readers (maybe bending the card so it doesn't make contact, or creating a gap?), so the customer tries to use the card and winds up having to swipe it. Anywhere I see the old Verifone or Ingenico I pull on the front of the machine before using it. Home Depot did just get rid of the old Ingenico models but still hasn't enabled tap to pay. Lowe's supposedly was going to be fully tap to pay enabled including Apple Pay by now but I think they're behind in rolling that out.

[ClownLoach]

Those old Ingenico pin pads are now the top target for skimmers. Walmart stores all over SoCal had them on checkstands. Now they switched to the new Ingenico model and Walmart has installed a large metal yellow bracket with their logo laser cut out to prevent attachment of a skimmer.

Very rarely do I see only one person at exit at Sam's and usually they're running right back after helping a customer or some such issue. Same for Costco who now is much more thorough and does everything manually - they need to implement receipt scanning and item scanning with portable devices fast.

All of the Wal Marts have flipped self checkout to the new pinpads (with the software update), but some still have the old pinpads on some of the registers. Some have Verifone pinpads on some of the registers too but that is somewhat rare.

I've never seen just one employee at a Costco exit; always at least two employees. One employee has been standard with the Reno Sam's pretty much forever.

One Grocery Outlet I go to (still has the older Verifone pinpads) took a hot glue gun and made big huge inch tall lumps on top of the pinpads (to prevent skimmers). Some others have done cute things like put a label on the pinpads that says "thank you" or "have a nice day." Anyone who is swiping a card at this point should figure out a way to avoid swiping a card if at all possible. In my area most 7-Eleven stations gas pumps are still swipe card with old never replaced swipe equipment from 20 years ago... supposedly checked daily for skimmers.

Have you noticed the new Verifone pinpad at Rite Aid and at the post office (also some Petsmarts)? It looks like there is a camera sticking up out of it so if someone tried to put a skimmer on it the pinpad would be recording them.

Unfortunately the camera on the new Verifone is a QR code reader.

I guess the skimmers are designed to interfere with the chip readers (maybe bending the card so it doesn't make contact, or creating a gap?), so the customer tries to use the card and winds up having to swipe it. Anywhere I see the old Verifone or Ingenico I pull on the front of the machine before using it. Home Depot did just get rid of the old Ingenico models but still hasn't enabled tap to pay. Lowe's supposedly was going to be fully tap to pay enabled including Apple Pay by now but I think they're behind in rolling that out.

I really think that the newer Clover and Toast machines at restaurants are the answer for the skimming problems. Fully wireless and portable. When the register is closed you put the reader away. The security on current wired models prevents disconnecting the cable and deactivates the pad. The skimmers get placed on closed registers. Stores need to be able to put these machines away when not in immediate use. The other option is that retailers need to install some kind of locking hood or mechanism over equipment on closed registers to prevent tampering.

[BillyGr]

Anywhere I see the old Verifone or Ingenico I pull on the front of the machine before using it.

I really think that the newer Clover and Toast machines at restaurants are the answer for the skimming problems. Fully wireless and portable. When the register is closed you put the reader away. The security on current wired models prevents disconnecting the cable and deactivates the pad. The skimmers get placed on closed registers. Stores need to be able to put these machines away when not in immediate use. The other option is that retailers need to install some kind of locking hood or mechanism over equipment on closed registers to prevent tampering.

Seems like another simple option would be to have each cashier do exactly what you do each time they are opening a register that hasn't been in use (not necessarily if they are just switching with someone else).

One other thought would be to use the same registers most of the time, and use alternating ones (say 1,3,5), so that if a new cashier comes on, they go to one of the ones between - the idea being it's less likely that those have been tampered with as someone there trying to do so is more likely to be noticed by either an employee or customer at the next lane(s) over than it would be at, say register 12 where no one has been nearby all day.