Inside the Costco Technology Being Unveiled in 27 Stores That Will ‘Change Checkout Forever’
Costco continues to implement new technology.
Waiting in a long queue has always been the hidden tax on bargain-hunting at Costco. That pain point is precisely what CEO Ron Vachris aims to eliminate with a new in-app Scan & Pay system, now transitioning from lab tests to a 27-warehouse pilot across the United States. Early results, according to Fox Business, have been “extremely successful in moving people through the lines and expediting the transactions.”
Why Costco Is Betting Big on Digital Checkout
More than 142 million cardholders and nearly a billion annual transactions mean even small efficiency gains translate into outsized financial impact. Member surveys consistently list checkout speed as a top frustration, and rivals such as Sam’s Club and BJ’s Wholesale already let shoppers ring themselves up on a phone. For a brand that prides itself on operational discipline, falling behind the competition was never an option.
How the Scan & Pay Pilot Works
Members open the Costco app, scan each item’s barcode as they place it in the cart, and pay within the app when they’re done. The system then generates a tamper-proof QR code, which a staffer (or, in later phases, an AI camera gantry) verifies at the exit—no paper receipt, no countertop PIN pad, no bottleneck. The approach parallels Sam’s Club’s best-in-class model but is entirely built by Costco’s tech team to integrate with its loyalty database and inventory engine.
Inside the First 27 Pilot Warehouses
Costco has not publicly published the list, but executives confirmed on the Q3 earnings call that 27 stores—largely a mix of high-volume legacy clubs and several of the 27 new warehouses slated to open in fiscal 2025—will house the hardware and dedicated Wi-Fi needed for Scan & Pay before year-end. The dual rollout strategy lets Costco stress-test the system with seasoned cashiers in existing markets while equipping brand-new sites from day one.
A Strategic Answer to Sam’s Club and BJ’s
Sam’s Club has already layered computer-vision exit portals onto its Scan & Go program, effectively phasing out human receipt checks. At the same time, BJ’s “ExpressPay” covers the East Coast mid-value segment. Costco’s management knows it must deliver a comparable or better experience to keep renewal rates above the industry-leading 92%. By stitching checkout directly into the Costco ecosystem—rather than a third-party wallet—the company keeps the data in-house and protects its prized margins.
Beyond Checkout: Digital Card, Faster Fuel, Flexible Payments
The pilot is only one plank of a broader digital push. Adoption of the digital membership card—already live in the app—rose sharply in stores where Scan & Pay is enabled, allowing Costco to link identities, receipts, and personalized offers with a single tap.
Meanwhile, Costco recently extended gas-station hours to 10 p.m. nationwide, making it easier for late-night commuters to justify that extra scan-and-go grocery stop. Fuel already accounts for roughly 12% of annual sales; the longer pump schedule is designed to enhance the value proposition without adding payroll to the warehouse floor.
Finally, the retailer’s new partnership with Affirm brings buy-now-pay-later plans (for $500–$17,500 online baskets) into the mix. While not yet available in stores, executives hinted that in-app financing could eventually be integrated alongside Scan & Pay, allowing shoppers to load a 75-inch TV into their cart, scan it, and split the bill over 12 months before they even reach the parking lot.
What Faster Checkout Means for 142.8 Million Members
For shoppers, the benefits are immediate: shorter lines, fewer receipt fumbling delays, and a shopping trip measured in minutes rather than half-hours. For Costco, the upside is twofold. First, faster turnover frees up parking spaces and increases transaction capacity during weekend peaks without requiring the construction of new square footage. Second, richer first-party data on basket composition and trip frequency arms buyers and marketers with insights they can’t glean from anonymous cash sales. In other words, every scan is also a datapoint.
The Road Ahead
If the 27-store pilot sustains the early gains—management is targeting a 30% reduction in average front-end dwell time—Costco plans a phased retrofit across high-density clubs in 2026, starting with California, Texas, and the Northeast corridor. Longer term, insiders say the company is evaluating AI-powered exit arches similar to Sam’s Club’s Grapevine, TX prototype, as well as smart-cart partnerships for bulky items. The race to a frictionless big-box experience is officially on, and the member-obsessed culture at Costco means the technology has to “just work” before it scales. If Scan & Pay delivers on its promise, the days of inching forward with an overflowing flatbed may soon be fodder for nostalgia forums, not a Saturday ritual.
