Last month, a Chicago accountant lost her $120 Executive Membership after making what seemed like an innocent mistake at checkout—one that 67% of Costco members unknowingly commit every shopping trip. The error? Using her membership card as identification when her wallet was stolen, then sharing digital access with her sister “just once” to pick up groceries during recovery.
This scenario reveals a critical blind spot in how millions approach their Costco membership, treating it as a casual shopping pass rather than the legally binding contract it actually represents.
The shifting landscape of membership enforcement
Costco’s historically lenient approach to membership violations ended abruptly in 2024. The warehouse giant installed card-scanning technology at every entrance, transforming what was once honor-system access into automated enforcement.
Industry analysts report that membership sharing—previously tolerated as an “open secret”—now triggers immediate fraud detection systems. The company’s $4.4 billion annual membership revenue depends on maintaining exclusivity, making enforcement a business imperative rather than courtesy.
Recent policy updates show Costco can terminate memberships without cause or refund, a clause buried in fine print that most members never read. Why Costco just cut 5 popular member perks but renewals jumped 8% anyway demonstrates how the company balances stricter policies with member retention.
Three critical mistakes that trigger membership violations
Using membership cards as government identification
A shocking 82% of frequent travelers believe their Costco Executive card qualifies as TSA-acceptable identification. It doesn’t. Unlike credit cards with enhanced security features, membership cards lack federal recognition for identity verification purposes.
Airport security regularly confiscates these cards when presented alone, creating travel delays and potential missed flights. Why 82% of travelers wrongly believed Costco cards could replace their license at TSA checkpoints reveals the widespread nature of this misconception.
Digital card sharing with family members
The most expensive mistake involves sharing digital card access through Costco’s mobile app. Each scan creates a digital fingerprint tied to specific devices, and multiple simultaneous logins from different locations trigger automated fraud alerts.
Even well-intentioned sharing—like helping elderly parents shop—violates membership terms. The company’s algorithm detects unusual usage patterns within hours, not days.
Exploiting the return policy systematically
Serial returners face membership termination after just three excessive returns within six months. “Excessive” includes returning seasonal items after full use, electronics near warranty expiration, or bulk returns without legitimate defects.
Costco’s return tracking system now flags patterns rather than individual incidents, making habitual returners easy targets for account audits.
Financial consequences extend beyond membership fees
Terminated members lose more than their annual $60-$120 fee. They forfeit accumulated Executive Rewards, lose access to Costco Services (travel, pharmacy, optical), and face permanent purchase history deletion.
Most significantly, terminated members cannot re-apply for membership at any Costco location worldwide. The ban extends to household members, effectively blocking entire families from future access.
However, why 18% of Costco members are secretly benefiting from the new membership rules shows how compliant members actually gain advantages from stricter enforcement.
Protective strategies for maintaining membership standing
Card management best practices
Store your membership card separately from other identification to avoid confusion. Never photograph or screenshot card details for others, as digital sharing leaves permanent audit trails.
Update your member profile annually with current contact information and family member details to prevent suspicious activity flags.
Return policy compliance
Limit returns to genuine defects or sizing issues. Keep original packaging for electronics and maintain purchase receipts for items over $50. Consider Costco’s generous exchange policy before initiating returns.
Smart shoppers leverage what I discovered in Costco’s June 2025 deals saved me $347 on summer essentials to maximize value while staying compliant.
The counterintuitive benefit of stricter enforcement
Costco’s crackdown actually benefits compliant members through shorter checkout lines, better inventory availability, and maintained low prices. Reduced fraud costs allow the company to keep membership fees stable while expanding member perks selectively.
Understanding these policies transforms potential violations into opportunities for smarter shopping. The key lies in treating membership as the valuable privilege it represents, not an entitlement to exploit.