Costco's Crackdown on Membership Sharing Sparks Outrage and Wall Street Approval

Costco's CFO, Richard Galanti, stated that only a "really small percent" of members misuse their cards by sharing them with non-members. However, due to the large number of transactions, even a small percentage can have a significant impact. To address this issue, Costco is increasingly asking shoppers at self-checkout lanes to show a member ID with their photo. Membership fees make up almost 2% of Costco's total revenues, and the company aims to reinforce member loyalty and generate continuing fee revenue. As of May, Costco had 124.7 million total cardholders, with 69.1 million paid members.