FinLogic FinLogic Quantitative Think Tank Center|Costco starts cracking down on membership sharing

Netflix cracking down on password sharing

First Netflix, now another brand is cracking down on membership sharing: Costco. The wholesale store, which requires shoppers to pay for membership, has seen an uptick of nonmembers using memberships that don't belong to them to shop at the store, a spokesperson told CBS News.

"Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses, making our membership fee and structure important to us," the spokesperson said.

The company recently expanded its self-checkout and noticed nonmembers were taking advantage there. "We don't feel it's right that nonmembers receive the same benefits and pricing as our members," the spokesperson said. "As we already ask for the membership card at checkout, we are now asking to see their membership card with their photo at our self-service checkout registers. If their membership card does not have a photo, then we ask for a photo ID."

The company's membership policy hasn't changed, the spokesperson said, adding that memberships have never been transferable and they have always asked customers to present their cards at checkout. 

The company says it has 119 million customers. The company's gold star memberships cost $60 per year and executive memberships, which come with added perks, cost $120. Each includes two cards for people living at the same address. 

Netflix recently started cracking down on subscription sharing. The streaming platform announced earlier this year that it would limit subscriptions to a household – so people outside of that household could not use the same password to log in.

In May, the company sent an email to subscribers saying everyone in a household can use a Netflix account wherever they are, but if someone lives outside that subscription holder's house, they must pay $7.99 a month to be added to the account. 

Netflix said more than 100 million accounts were sharing passwords, which it said undermines the company's ability to invest and improve. Their subscribers dropped by 200,000 in the first quarter of 2022, which prompted the company to change its password policy. 

Caitlin O'Kane

Caitlin O'Kane is a digital content producer covering trending stories for CBS News and its good news brand, The Uplift.