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COSTCO has confirmed it will continue its controversial but “effective” methods to deter shoplifters.
While rivals such as Walmart and Target are struggling to contain retail theft, Costco has two main ways to fight the crime.
Walmart and Target continue to lose revenue annually as a result of rampant retail theft, reported The Street on February 5.
Retailers have been beefing up in-store security as shoplifting cases spiral in the States.
Walmart could be losing as much as $3 billion a year to theft, according to an estimate by Reuters.
But Costco is adamant that its losses are negligible.
And that’s due to the strict implementation of two rules.
The warehouse retailer now asks its members to show proof at entrances before shopping.
Costco expects customers to show a photo ID alongside their membership card.
Also, the chain asks shoppers to show their receipts to checkers before they leave.
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“By strictly controlling the entrances and exits and using a membership format, we believe our inventory losses (shrinkage) are well below those of typical retail operations,” said Costco in its 2025 Annual Report.
“It is standard practice at all our warehouse locations to verify purchase receipts when customers exit our buildings,” the retailer also said on its website.
“We do this to double-check that the items purchased have been correctly processed by our cashiers.
“It’s our most effective method of maintaining accuracy in inventory control, and it’s also a good way to ensure that our members have been charged properly for their purchases.”
Costco membership scanners at warehouse entrances
Membership scanning devices are used at the entrance door of the shoppers’ local warehouse.
Prior to entering, all members must scan their physical or digital membership card by placing the barcode or QR code against the scanner.
- Primary Member Use: Only the primary cardholder can use this Costco membership card. Sharing it for purchases is not allowed as the photo on the card must match the person using it.
- Household Card: Each primary member can add one free household cardholder who lives at the same address. This person will receive their own membership card and can shop at Costco independently.
- Guest Policy: Members can bring up to two guests per visit to Costco. However, only the member can make purchases. Guests must be accompanied by the member.
- Authorized Cardholder: For an additional fee, you can add an authorized cardholder, such as a family member or friend, who doesn’t reside at your address. They will receive their own card and can shop independently.
Costco offers its members several perks that save them money, including travel, cleaning, and vision support. Costco relies on its membership fees for revenue.
But the push to have shoppers both verify their membership and check receipts at the exit has proved “controversial,” wrote The Street in July 2025.
“It’s hard enough having to wait in a long line to get to a cashier,” it noted.
“But getting through that only to then have to wait for a receipt-checker to do a shopping cart scan adds insult to injury.”
It rolled out the new policies from 2024 to prevent non-members from secretly shopping in-store.
Sneaky consumers had previously tried to get around the annual membership costs by using a friend’s membership card to get in and check out.
So Costco began scanning membership cards and matching them to government-issued IDs at store entrances.
But it’s also proved contentious it has resulted in employee abuse from shoppers.
“I’ve seen coworkers reduced to tears, crying because a member decided that it was OK to take out their frustration on a woman standing at a scanner,” said one staffer on Reddit back in 2024.
“What brainiac put scanners at the entrance?” asked one annoyed shopper on X.
“Causing lines. Lines going in, lines going out while you scrutinize my purchases.
“Why didn’t you just put the scanners at the registers if you are looking at the photos to match to the cards,” they added.
“Liking your company less.”
Yet Costco has previously said that “fewer entrances mean fewer blind spots” while receipt checks make it much harder to steal anything from the store.
“Because everyone inside has already paid to be there, there’s far fewer anonymous shoppers – a key driver of retail theft,” it added.
Richard Galanti, Costco’s boss, has said the store’s overall theft rate, known as “shrinkage” currently sits at between 0.1 and 0.2 per cent.
Costco’s 2025 Annual Report
Costco’s recent expansion has included 15 new locations in the U.S., and two in Canada.
By the end of 2025, it had a total 633 outlets in the United States and Puerto Rico, along with 114 throughout Canada.
Its membership warehouses and e-commerce sites are based on offering low prices on a limited selection of products.
This helps achieve high sales volumes and rapid inventory turnover.
Costco’s no-frills, self-service warehouse facilities, and turnover “enable us to operate profitably at significantly lower gross margins (net sales less merchandise costs) than most other retailers.”
“Our annual fee for these memberships is $65 in the U.S.
“Because shoppers are attracted principally by the quality of merchandise and low prices, our warehouses are not elaborate.
“At the end of 2025, our warehouses contained approximately 93.6 million square feet in the U.S. and 15.9 million in Canada.”
Source: Costco
Other big chains have responded to theft problems by locking more products behind cabinets, forcing shoppers to ask staff to open them.
US retailers are estimated to have lost more than $47 billion to shoplifting in 2025.
It comes as Costco shoppers have spotted new membership-verification technology at its food courts.
This is because the warehouse club is striving to prevent non-members from eating at the café.
