Credit Card Skimmer Leads to Costco Data Breach

Retail giant Costco Wholesale Corporation sent letters this month to its customers alerting them that their payment information may have been stolen through a credit card skimmer while they were shopping at one of their stores, according to a BleepingComputer report Friday (Nov. 12).

Costco found the card-skimming device in one of its stores during a routine check by store personnel. The company removed the device and alerted the authorities to the breach, and Costco officials are now working with law enforcement on the investigation.

“We recently discovered a payment card skimming device at a Costco warehouse you recently visited,” Costco wrote in a letter to potentially impacted customers. “Our member records indicate that you swiped your payment card to make a purchase at the affected terminal during the time the device may have been operating.”

Costco has 737 membership-only retail stores across the U.S., making it the fifth-largest retailer in the world and the 10th-largest corporation in the country by total revenue, according to Fortune 500 rankings. It also operates eCommerce websites for shoppers in North and South America, Europe and Asia.

Customers affected by the breach may have had their payment information stolen if the suspect(s) who installed the card skimmer gained access before Costco workers found and removed the device.

“If unauthorized parties were able to remove information from the device before it was discovered, they may have acquired the magnetic stripe of your payment card, including your name, card number, card expiration date, and CVV,” Costco told customers in the letter.

Costco told potentially affected customers to keep an eye on their bank and credit card statements for charges they didn’t make and to report any suspicious or unauthorized activity to the issuing companies.

The company didn’t say how many Costco customers were affected by the breach or where they found the skimming device, but BleepingReport noted that customers have noticed unauthorized transactions on their cards since at least February.

Related: Costco Same-Store Sales Up 10% in US for September, 8% International

In September, Costco reported same-store growth of 10%, 8% growth in international sales and 7.3% growth in Canada. The company’s fourth-quarter earnings were up 11.2% over 2020, and there was also a 44.4% increase for the fiscal year.

The company saw its net sales boosted by 17.5% to $61.4 billion, while net sales went from $1.39 billion to $1.67 billion.