Why Costco Checks Your Receipt and What It Looks for When You Leave

Here is the real reason why Costco checks your receipt.

Shopping at Costco can be an all-day affair. With 120 million members worldwide, it's the third-largest retailer in the world, behind Walmart and Amazon. In fact, 37% of Americans shop at Costco, with the average customer spending $144 per shopping trip and buying nine items. Costco is a great place to save money on everyday purchases and also big-ticket items like electronics. Once you pay and head out the door, you have one more stop to make: the final receipt check. Have you ever wondered what they are checking and why Costco has someone standing there?

Standard practice

"It is standard practice at all our warehouse locations to verify purchase receipts when customers exit our buildings," Costco states on its website.

"We do this to double-check that the items purchased have been correctly processed by our cashiers. It's our most effective method of maintaining accuracy in inventory control, and it's also a good way to ensure that our members have been charged properly for their purchases."

Costco isn't the only store to check your receipt and what you bought at the door. Other wholesalers such as Sam's Club do the same. A Sam's Club representative said in a statement that the purpose of checking your receipt is "To ensure that all members are correctly charged for the merchandise purchased, all receipts and merchandise will be inspected as you leave the warehouse."

Inventory management

One of the obvious purposes of this standard practice is to deter people from stealing. By strictly controlling the entrances and exits and checking membership cards as well as receipts, Costco's inventory losses, also known as shrinkage, are well below that of its retail competitors.

Costco's shrinkage represents just 0.11% to 0.12% of sales. In comparison, the retail industry average is in the 1%-2% range. According to the National Retail Federation, the average shrinkage is 1.6%, almost 15 times higher than Costco. Checking receipts at the door makes it difficult for thieves to succeed.

According to Costco's CFO Richard Galanti, one of the secrets to the Costco's success has been to keep shoplifting to a bare minimum. When retailers start cutting staff to boost their margins, it can lead to an increase in shoplifting since there are fewer eyes to watch exits.

What are they checking on the receipt?

While the goal is to ensure shoplifting is kept to a minimum and to ensure customers are not over or undercharged for their purchases, how does the receipt checker determine that by just glancing at your cart and highlighting your receipt?

According to former employees of Costco published in Business Insider, here's what they specifically look for:

• A code on the top and bottom of the receipt that changes daily so employees know the receipt was, indeed, printed that day.
• The item count on the bottom of the receipt to make sure there were no under or over charges.
• High-end items such as jewelry, stamps, electronics, or items over $300, which need supervisors' initials on them.
• Large items like packages of tissues and bottled water, which have various signifiers on the receipt to ensure final checks include a look at the bottom of the basket.

In the past 10 years, Costco has more than tripled its revenue. Costco's sales amounted to $192 billion in 2021. The money Costco saves in shrinkage compared to a typical retailer is $2.85 billion! Clearly the receipt checkers are well worth the money Costco pays them.