Costco says its new member ID scanners at entrances are good for business — and shoppers too

• Costco installed ID scanners at more than half of its US warehouses and says the system is working.
• CEO Ron Vachris said the devices help things run more smoothly — for the company and its customers.
• The company also said members have largely shrugged off the latest increase to the annual fee.

Costco's ID scanners appear to be a hit.

The devices, which were introduced in the US earlier this year, are now active in approximately 350 warehouses across the country — and CEO Ron Vachris said they're already having an impact on the business.

"Reaction has been very positive," Vachris said during the company's fourth quarter earnings call on Thursday. "Both from the members and from the operators as well."

Vachris noted that the technology has for years been a fixture at the company's European and UK warehouses, and was piloted for months in the US before being rolled out more widely.

The chief executive, who started at the company as a forklift driver, outlined several key benefits that have emerged with the new system.

"It gives our operators real-time traffic counts throughout the day, so we're able to adjust front-end lines that we need to open and close," he said. "We can monitor our fresh foods a little better because we know what the traffic counts look like and so forth."

He also said it speeds up checkout because shoppers are no longer surprised to find out their membership fee is due. Instead, lapsed members are directed to the service desk to renew before they fill their carts.

"Members are very appreciative of that," Vachris said. "They get up to the front and they're not shocked by that process."

Vachris credited the new procedure with giving a slight lift in sign-ups and renewals.

"As our volumes grow, we're looking for everything we can find to use technology to help get our members through the front ends in a good smooth manner," he said.

Of course, Costco still lags far behind the technological pace set by Sam's Club, where members are able to shop and pay in stores using the mobile app and even walk out without a physical receipt inspection.

Elsewhere on the call, CFO Gary Millerchip noted that members have largely shrugged off the news of the recent annual fee hike.

"We've been able to stave off inflation on things, like the hot dog pricing at $1.50 and the rotisserie chicken at $4.99, and generally demonstrating the way that we're lowering prices for members wherever we can," he said.

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