Costco crackdown: Retailer to push back against membership sharing

Costco is the latest company to announce a crackdown on membership rules to help improve its bottom line.

The retailer said it was not changing any membership rules. Instead, it will start to crackdown on the enforcement of current rules.

Right now, around 69 million households have an annual membership to Costco. The entry level membership allows the cardholder to bring one additional person, who lives at the same home address, with them to shop in the store.

"Those Costco memberships equal revenue and profit for Costco the retailer, so when that membership gets shared, Costco ends up losing money and losing profits," retail analyst Hitha Herzog said.

Costco requires shoppers to show their ID cards before entering the store and when checking out. The ID cards have a photograph of the cardholder on them.

However, some shoppers were able to borrow someone else's membership card and use the self checkout counter to purchase items without getting caught.

Costco is reportedly now doing spot checks at the self checkout counters to discourage non-members.

The retail giant released the following statement about the situation:

"Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses...We don't feel it's right that nonmembers receive the same benefits and pricing as our members."

Costco is just the latest membership-based company to crackdown on enforcing membership rules. Most notably, Netflix recently cracked down on people sharing their passwords with anyone living at a different address.