Costco Without the Card: 1 in 5 Americans Use Someone Else’s Costco Membership
Membership sharing is an epidemic that goes far beyond copying and pasting your Netflix password into your group chat. As Americans experience rampant subscription fatigue, many are looking to cut down on their monthly bills by utilizing any service already paid for by their friends and families they can.
The latest corporation to push back? Costco.
Everyone’s favorite warehouse club will soon require anyone entering one of its 600+ US locations to scan their membership card upon entry. Gone is the much more relaxed practice of waving your card to an employee stationed at the entrance. Members without pictures on their cards will also be required to provide photo identification.
Are Costco executives being paranoid and penny-pinching, or are they right to be concerned about the practice? We studied Costco members and non-members alike in order to determine, among other things, just how commonplace it is for Americans to take advantage of the $1.50 hot-dog-and-soda deal on someone else’s dime.
Key findings
- Widespread Membership Sharing: 21% of non-members admit to shopping at Costco using someone else's membership
- Missed Opportunity: Costco could be missing out on $1.75 billion in membership revenue to those shopping without their own membership
- Sharing rates climb to over 30% in California, Colorado, Arizona, and Nevada
- High Repeat Usage by Non-Members: Non-members using borrowed memberships visited Costco an average of 4.3 times over the past year, suggesting significant potential lost revenue for Costco.
- Among Costco members, 14% admit to allowing someone else to use their membership, and 67% have taken a non-member shopping with them.
- Minimal Detection: Only 13% of non-members borrowing Costco memberships reported getting caught, making it a low-risk practice for those who do it
Sharing is (maybe not so) caring
We asked 2,000 US residents who are not members at Costco if they have shopped at the retailer by using someone else’s membership in the last 12 months. We learned more than 1 in 5 (21%) have done so. California (34%) and Arizona (33%) lead the nation when it comes to Costco membership sharing.
Costco’s home state, Washington, is also home to a relatively low membership sharing rate of 17%. Though other western states such as Nevada (31%) and Colorado (30%) rank among the biggest culprits. Down south, residents of Florida and North Carolina, both at 29%, are also home to high rates of Costco membership sharing.
With a national average of 21% of non-members shopping at Costco using someone else’s membership, we can determine the potential membership revenue loss for the warehouse giant. As of the 2020 census, there are 258.3 million adults living in the US. Subtracting Costco’s approximately 64 million paid memberships, plus 64 million additional cardholders (each membership allows a second cardholder living at the same address), we’re left with 116 million adults without a Costco card to call their own. From this pool of 116 million, the 21% shopping at Costco with someone else’s card is equivalent to 24.4 million lost memberships.
In 2023, Costco collected $4.6 billion in membership fees from its 64 million paid members. That’s $71.88 per paid membership. If Costco could collect the same $71.88 average membership fee annually from each of the 24.4 million who may be shopping with a borrowed membership, the world’s third-largest retailer could potentially collect an additional $1.75 billion in membership revenue.
One thing is clear: membership sharing is rarely a one-time thing. Once those oversized automatic doors welcome non-members for the first time, the robust offerings are just too much to stop them coming back time and time again. We learned non-members using another’s membership visited Costco an average of 4.3 times over the past year.
It’s not just laziness and convenience driving these habits. Non-members cited their reasons for borrowing someone else's Costco membership, and top ones include: not being able to afford one's own membership, the distance from Costco being too far to justify the cost, and the lack of regularly needed items at Costco.
What’s more, non-members reported that the most enticing products that lead to the borrowing of Costco memberships are household essentials and groceries, with selection rates of 83% and 78% respectively. This indicates that the need to access bulk necessities drive most of the borrowing behavior.
Non-members are also more than happy to access items like electronics (65%) and clothing (52%) at the stores in high rates, however.
Perhaps of greatest interest to executives is that only 13% of those borrowing a membership have been caught. On the members' side, 14% admit to allowing someone else to use their membership, and 67% have taken a non-member shopping with them.
Seems as if the call is coming from inside the house.
The great Costco crackdown
While Netflix’s recent crackdown on password sharing resulted in membership increases, a Costco membership is a different beast. As the paragon of affordable bulk shopping for working Americans, Costco certainly risks alienating its membership base with their latest crackdown.
Time will tell if Costco’s tightening of membership utilization policies will contribute to the company’s future success. But early polling shows positive signs.
The majority of Costco members (52%) find the policy of scanning membership cards upon entry a minor annoyance but understand its necessity. After all, they are the ones paying for membership perks that so often go to non-members.
Only a small fraction (12%) think the policy goes too far.
Methodology
This survey was conducted in September 2024 utilizing a pool of 2,000 Americans who do not currently possess a membership to Costco Wholesale and a pool of 2,000 Americans who are current members. The median age of the respondents was 37. Gender distribution was 53% men, 45% women, and 2% other gender identities.
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