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Costco’s not raising annual membership fees yet, but it’s bracing customers for it—’It’s when, not if’

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Costco hasn’t raised the price of its annual membership since 2017—and it says it’s not planning to do so immediately—but the retailer is warning customers they will be paying more in the future.

Chief financial officer Richard Galanti, speaking on an earnings call Thursday, said “it’s when, not if,” when asked about increases to the fees. (Costco typically raises its membership fee every five years or so, and analysts have been anticipating a jump for some time now.)

This was Galanti’s last call as CFO, as he plans to retire in mid-March (and will be replaced by Gary Millerchip). He joked on the call that the announcement of higher fees would be a burden he no longer had to bear.

“I’ve been joking with Gary: It will be on his watch, not mine,” Galanti said.

Another sign higher fees might be coming? Costco fell short of analyst expectations for the holiday quarter. Revenue came in at $58.44 billion, compared to an expected $59.16 billion. (Earnings per share were higher than expected, though, at $3.92 per share vs. an expectation of $3.62.)

While the company hasn’t raised the price of a Costco membership, it has been cracking down hard recently on members who share their cards with friends. Most stores now pair membership cards with photo IDs at checkout. And one location recently started requiring members to scan their cards when they enter the store, as opposed to the long-standing practice of just flashing a card at the store employee on duty.

The push to eliminate membership sharing started last June. The company, at the time, said in a statement: “We don’t feel it’s right that non-members receive the same benefits and pricing as our members. Costco is able to keep our prices as low as possible because our membership fees help offset our operational expenses, making our membership fee and structure important to us.”

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