3 Good Reasons Costco Is Tightening Up Its Membership Policies
Costco Wholesale (NASDAQ: COST) is cracking down on people sharing memberships, particularly at self-checkout lanes. Consumers may not love the idea but it's a good move for the business and investors. Here's why the stock is a much better buy as Costco tightens up its membership policies.
Membership fees are an important part of Costco's business model as they allow the company to price products more competitively and bolster its gross margin. Typically, they have accounted for over 2% of the company's revenue. However, in the past couple of years with spending growing rapidly, that ratio has fallen below 2%:
Data source: company filings. Chart by author.
Source Fool.com
