Costco quietly fixed a massive customer checkout pain point

Costco’s business model is built around offering no frills.

The chain calls its stores “warehouses,” because they’re basically set up like exactly that. Merchandise sits on pallets, and Costco does not invest in the trappings of many traditional stores.

Basically, the chain tries to do everything possible to minimize cost so it can pass on the savings to members.

“Our operating philosophy has been simple. Keep costs down and pass the savings on to our members. Our large membership base and tremendous buying power, combined with our never-ending quest for efficiency, result in the best possible prices for our members,” the chain explained on its website.

Innovation costs money, and Costco tends to sit back and watch its competitors. If something works, like using Instacart as a same-day delivery option for members, the warehouse club adopts it.

But just because Costco has always been careful with its technology investments does not mean the chain never spends money improving the user experience. The chain recently made an upgrade that members will like.

Costco tested self-checkout and has largely abandoned that experiment. Now, it has added a new checkout method that keeps human cashiers in the mix, while speeding up the process for members.

“Another way we are improving the member experience is through the rollout of enhanced checkout technology in all U.S. warehouses,” CEO Ron Vachris shared during the warehouse club’s fourth-quarter earnings call.

The CEO explained how it works.

“This is speeding up the checkout process by allowing our employees to scan small- and medium-sized transactions while the member is still in line. So upon reaching the cashier, nothing has to be removed from the cart and only payment is needed,” he added.

It’s a small change, but one that makes the process of checking out faster for members.

Costco has also been working to improve its technology in other areas.

“We also continue to make progress with our technology road map for digital and e-commerce,” Vachris shared.

The chain has also found a way to make its sales process for limited-edition or rare items more fair.

More Retail:

“Enhancements this quarter included using data augmentation to improve search effectiveness, adding passwordless sign-in to our mobile app, and creating a waiting room for high-velocity items such as Pokémon cards. These waiting rooms reduce the traffic from bots, increase the opportunity for members to purchase high-demand items, while improving the speed and the stability of the site during peak traffic periods.

Costco has also added technology — card scanners that scan a member’s card before they can enter the store, which are less popular.

Related: Costco will soon do something it only does 7 times a year

Zachs Equity Research thinks these changes are a positive for Costco.

“Several initiatives fueled this growth. Costco’s new partnership with Affirm introduced Buy Now, Pay Later financing, making large-ticket items like furniture and appliances more accessible. Personalized product recommendation tools and the expanding Costco Next marketplace also enhanced the member experience. These efforts strengthen Costco’s digital ecosystem without undermining its value-first philosophy,” reported Nasdaq.com.

• Costco is rolling out membership-scanning devices at the entrance of its warehouse stores.

• Members must scan either their physical membership cardor their digital card (QR code) using the barcode/QR scanner at the door.

• An attendant is typically stationed at the door to help with the scanning process.

• If your membership is inactive or expired, you’ll be asked to stop by the membership counter before entering.

• If your membership card does not have a photo, you may need to show a valid photo ID when scanning in.

• Guests (non-members) must be accompanied by a valid member to enter.

• The goal of these scanners is to crack down on unauthorized membership sharing (people using someone else’s card).
  Source: Axios

• The rollout is “over the coming months,” per Costco, so not all locations may have the scanners yet.
  Source: Costco Customer Service

Members seem to mostly support the change.

“Better than getting stuck behind someone at the register who acts all surprised that you need a membership to shop there. Had that happen a couple times now,” AngryBox 1842 shared on Reddit.

Many of the posters used the same logic.

“It probably avoids fights at checkout. And you have to scan an ID to get in a gym where you’re a member, so it’s funny that people are probably mad about Costco doing the same,” wrote 1cecream4breakfast.

Some also see the policy as offering another benefit.

“One thing this will help with is theft. People get fake cards and get in the door. They then shoplift. Especially in the winter when it’s easier to conceal things in big coats,” posted everybodyBnicpels.

Related: Struggling mall retailer closes stores, shares turnaround plan

This story was originally reported by TheStreet on Nov 23, 2025, where it first appeared in the Retail section. Add TheStreet as a Preferred Source by clicking here.