Costco takes a page from Netflix and cracks down on membership sharing

Unlike many big-box retailers, in order to shop at a Costco you need to be a paying member, which costs between $60 and $120 a year. The membership card gets you through the front doors and gets you access to all those sweet warehouse deals. When checking out, a member needs to show their card to the cashier to prove they can shop there.

Yet as Costco has expanded its self-checkout lanes in recent years, nonmembers have increasingly been taking advantage of the fact that there is no cashier to check the membership card, which means they could get the same deals that paying members get. But now Costco is putting a stop to this loophole.

As CNBC reports, Costco will now begin asking those who are using the self-checkout lanes to see their membership card. And if the membership card doesn’t have a photo, Costco will also ask the shopper to show photo ID that proves the name on the membership card matches the identity of the shopper.

“We don’t feel it’s right that non members receive the same benefits and pricing as our members,” Costco said in a statement.

The revenue generated from membership fees is part of the reason Costco can offer such low prices on many of its bulk products—the fees, in effect, subsidize the costs of items in the store, so it’s understandable that Costco doesn’t want nonpaying members benefitting from its low prices.

The move comes about a month after Netflix finally rolled out its long-anticipated crackdown on password sharing, an attempt to ensure that people using the same streaming account live in the same household.

Though their business models are very different, Netflix’s and Costco’s crackdowns in recent months could signify the beginning of a broader wave of businesses tightening their rules or stepping up enforcement with regard to membership sharing as they look to bolster their bottom lines.