Betrayal of Trust

How Costco Almost Lost Me as a Member


(Formerly: Why Costco is Losing Me as a Member)

Jed Margolin

It snowed a little last Friday (October 10, 2008). It was a little early for it to snow here and it mostly melted by Saturday afternoon but I decided to get the snow tires put on my Nissan Frontier 4x4 truck. I live in the Virginia City Highlands, a remote mountainous community 22 miles Southeast of Reno, Nevada and five miles down the road from Virginia City. During most Winters up here you need a 4WD (or AWD) vehicle to get around.  

I bought the truck in March 2007 and in October 2007 I bought Michelin snow tires for it from Costco. By then I had been a long time Costco member. They acquired me when they bought Price Club in 1993. At the time I had already been a Price Club member for several years.

My truck came with a Tire Pressure Monitoring System (TPMS) which consisted of a wireless sensor in each tire (part of the valve stem) and a receiver in the truck. Because of the cost of the sensors ($100+ each) I was concerned that the work be done properly so they not be damaged. The associate at the Costco Tire Center in the Reno Costco assured me they had lots of experience with TPMS and it would be ok. That is why I bought the tires there.

It did go ok.

In June 2008 I had the snow tires taken off and the regular tires put on. Maybe I waited longer than I needed to but sometimes we get a late Spring snowstorm.


It went ok, too.


So I went to Costco on Monday (October 13) to have the snow tires put on. It did not go ok.


I was told that two of the service techs had failed to show up for work and that it would take 2½ hours. It takes me 45 minutes to drive to Costco and 45 minutes to drive back. All that time would have been wasted and then I would have had to find some other shop to change the tires. I said ok.


After waiting over an hour I saw that they hadn’t even started with my truck. I decided I didn’t want to wait another 1½ hours so I went to the Tire Center to take my truck back and leave. There were four people in line ahead of me at the counter. Based on my previous experience I estimated I would have to stand there waiting for 25 minutes. That’s crazy. I went back into the warehouse and went to the Member Services Counter to tell them I was dissatisfied with how things were working out. A manager was called over and said he would get my truck back for me. We went back to the Tire Center. The Service Manager said he would get my truck done in 45 minutes. I said ok. The 45 minutes turned into an hour.


By the time I got my truck back I had been there 2½ hours. I was waiting by the bay when the Service Manager brought it out. When he gave it back to me he said that that TMPS light was on but that it would go out after I had driven the truck for 20 minutes.


When I got into the tuck I saw that the TPMS light was not only on, it was flashing. I had never seen it flashing before and I didn’t know what it meant. I should have gone back and asked, but after waiting for 2½ hours I was tired and wanted to go home.


The drive between Costco and my home takes about 45 minutes. The light stopped flashing after about a minute but it never went out.


I looked in the Operator’s Manual. It said that a flashing TPMS light means there is a malfunction in the system.


Is this something that only happens in Nissan Frontiers? If it is, then the Service Manager could be excused for not knowing it.


The answer is that the law mandating TPMS specifically says that the driver must be alerted when the TPMS malfunctions. Note that a malfunction is different from a low tire pressure indication. (See TPMS in a Nutshell.) Manufacturers have two options for alerting drivers to a TPMS malfunction.


1.  They can have a separate light to indicate a malfunctioning TPMS;

2.  If there is only one light, they must cause the light to flash for one minute.


Since this is the industry standard it means the Service Manager gave the truck back to me knowing that the TPMS was malfunctioning.


That is what this is all about.


I called the Reno warehouse and spoke to the Warehouse Manager Bob Tote.


I will summarize my conversations with him.


1.  The TPMS was working when I bought the truck in;

2.  It was malfunctioning when they gave the truck back to me;

3.  They knew it was malfunctioning;

4.  They didn’t tell me.


Tote: Why don’t you bring it back in and we will see if we can fix it.


Me: After how things went today I don’t want your people anywhere near my truck.


Tote: Then take it to the Nissan Dealer (Nissan of Reno) and I will pay for it.


Me: That will waste at least another day (and probably two days) of my life. How are you going to compensate me for that?


Tote:  I can’t.


Me:  That is unacceptable.


Tote:  I will give you a year’s free membership. It’s worth $100.


Me:  No, it isn’t. A year’s free membership doesn’t cost you anything.


Tote: Yes, it does, it’s worth $100.


Me:  No, it isn’t, especially if I don’t renew my membership.


Tote:  What do you want?


Me:  The only thing in this society that people value is money, so you need to give me enough money to give you an incentive to fix the problems with your Tire Center.


Tote:  How much?


Me:  I don’t have any way of coming up with a number. {Then, after thinking about it for a minute or two} I paid $600 for the tires. Make it $600.


Tote: I have to talk to a Vice-President about it.


Me:  Fine, then do it.



Our next conversation:


Tote:  We don’t want you to bring your truck back here; take it to Nissan of Reno. I will pay for it (and a rental car if necessary) and give you a year’s free membership. That is all I can do for you.


Me:  That is unacceptable.



On Tuesday I called Nissan of Reno. They were able to get me an appointment for later in the morning. Because of when I brought it in it was necessary for me to get a rental car. Later in the afternoon I spoke to their Service Manager, Keoni. He said that for some reason none of the tire sensors was sending a signal and none was registered with the truck’s TPMS system. He had no idea why. They used their equipment to program the sensors and the TPMS system and everything was working again. He suspected that the Costco Tire Center did not have the equipment to set the tire sensors and/or TPMS system. The total cost was $59.13. (I had some unkind things to say about my previous experience with Nissan of Reno. Despite this, Keoni and everyone else at the dealership treated me very courteously and professionally. I respect them for that. And the truck was fixed.)



In the 15 years I have been a Costco member (and several years with Price Club before that) I never had a major problem until I moved out here and started going to the Reno Warehouse. I will go into more detail about the other problems later.

What I discovered is that if the local warehouse cannot fix the problem the thing to do is to call Costco Headquarters in Issaquah, Washington. It isn’t easy to find their phone number. I found it by looking through Costco’s SEC filings: 425-313-8100.

The best thing to do is to ask to talk to the Buyer for the department you are having a problem with. Costco Buyers have a great deal of authority. After all, they are a very important part of Costco’s success. They are very skilled negotiators and get the best prices from vendors. I am told that vendors consider them very tough negotiators; some vendors fear them. I guess whether they “skilled” or “feared” depends on which side you are on. I’m on their side.

When I called about this problem I was transferred to Patrick McClintock the Buyer for Tires. Unfortunately, he was on vacation. I tried his assistants but they were unavailable.


I called the main number and asked to speak to someone in the Office of the President. I was transferred to someone who was also on vacation.


I kept calling back until I was connected to a live person, Mr. Colin Kremo, the Assistant General Manager for Costco.


I explained the problem to Mr. Kremo, what I wanted, and why I wanted it.


Again, I will summarize the highlights of our conversations.


Kremo:  You are asking for too much money.


Me:  It isn’t about the money. It’s about giving Mr. Tote the incentive to fix the problems with the Tire Center. I am very unhappy with this situation.  If I have to I will write an article about it and post it on my web site.


{ Mr. Kremo’s response made it sound like he considered it extortion.}


Kremo:  Costco will pay you $300.


Me:  I will think about it.



This last part of our conversations happened on Wednesday morning. Then I took the rental car back to Enterprise and they took me to Nissan of Reno.


I paid for the work and, after looking at some of the new trucks (the Titan is a very serious truck) I headed home.


On the way I thought about what I was going to do.


By the time I got home I had mostly made my decision. Not completely, but mostly.


I called Colin Kremo to tell him. No answer.


I called the Reno Warehouse to ask them (politely) to take my membership off of automatic renewal. I was told I had to come in to the warehouse so I could prove I was who I said I was. I said, “I don’t want to come in.” The Associate said the only other way was for me to cancel my American Express card so Costco could not charge to it. That’s when I completely made my decision.


I think he was just messing with me because when I called the Costco number for General Member Service (800-774-2678) it only took a minute or so to have my membership removed from automatic renewal.


I called Mr. Kremo again. He answered.


I told him what I had spent:


Costco   $24.00

Nissan of Reno  $59.13

Enterprise Car   $57.24

Total   $140.37


I reminded him that it was never about the money. It was about Betrayal of Trust.


Then I told him my decision.


I would not accept any money from Costco. Zero.


He asked, “What about the money you spent to have it fixed?”


Me: “ Nope. Zero. However, I am going to write the article, and it is going to be a scorcher.”



So far, you probably haven’t found this article very scorching unless you realize that if you have tire work done at a Costco Tire Center and you have a vehicle with a Tire Pressure Monitoring System, when you get the vehicle back the Tire Pressure Monitoring System might not work and you may have to bring it to a dealer to get it working again. Costco doesn’t have the equipment to work on Tire Pressure Monitoring Systems. Even if Costco pays for it you will have a small part of your life wasted. For me, if I want to gamble I will go to one of the many fine casinos in Reno, not the Costco Tire Center.


And, by the way, in Nevada there are no certification requirements for automobile mechanics and there is no special agency like the Bureau of Automotive Repair. In Nevada you are on your own.



You might find the following more scorching.



Costco Pharmacy.


When I lived in San Jose, the people at the Costco Pharmacy (on Senter Road) were always kind, compassionate, and efficient. After all, many of their clients are sick and old (like me).


At the Costco Pharmacy in Reno, they are not kind, compassionate, or efficient. They are brusk, inefficient, and downright rude. I won’t bore you with the details.


My worst experience was when they gave me the wrong meds.


One of my medical problems is gastroparesis. It means my stomach doesn’t empty. The drug that is generally prescribed is Reglan (metoclopramide). However, the long term use of Reglan comes with the significant risk of causing tardive dyskinesia, a movement disorder characterized by involuntary worm-like movements of the tongue. In some cases the tardive dyskinesia is irreversible even if you stop taking Reglan.


Fortunately, there is an alternative: Erythromycin, which is normally used as an antibiotic. Some people taking Erythromycin experience stomach upset. That is the Erythromycin stimulating their stomach. According to this study ( which compared Reglan and Erythromycin, “Both agents facilitate tolerance to intragastric EN, but erythromycin may be more effective than metoclopramide for enhancing gastric motility.”


Because some people taking Erythromycin experience stomach upset, there are timed-release versions of Erythromycin. Those versions won’t work if you are taking Erythromycin for gastroparesis because you want the Erythromycin to stimulate your stomach.


After I moved here I had my prescription for Erythromycin filled at the Reno Costco Pharmacy (January 10, 2006). As I was walking away I noticed they had given me Erythrocin instead of Erythromycin. I went back to the counter and asked about it. I told them why I was taking Erythromycin (gastroparesis) and was concerned that the stuff they had given me wouldn’t work. They said, “It’s the same thing and besides, your prescription says Generic so we can give you anything we want.”


After I started taking it things started going wrong. My gastroparesis was markedly worse and I realized the Erythrocin wasn’t working. I looked up Erythrocin in a drug book. It turns out that Erythrocin is designed to minimize stomach upset. That’s why it didn’t work for me. I went back to the pharmacy and got the right meds.


A few refills later they wanted to give me another form of Erythromycin. This time I demanded to see the Pharmacist. When he looked it up he found that it was a timed-released version of Erythromycin. Oops again.


After that I started buying my Erythromycin from Walgreens. I only had to explain it to them once (I am taking it for gastroparesis. I need Erythromycin Base Tabs, no time release). They have never tried to give me anything else. They are also kind and compassionate.




Whirlpool Washer


In late February, 2007 my 23-old Sears Kenmore washer started leaking from the bottom. I decided it was time to buy a new washer. My matching 23-old Sears Kenmore dryer never did dry clothes very fast so I decided to replace it as well. After doing some research I bought a matching Whirlpool washer and dryer from I ordered it in early March, 2007. They were delivered, the old ones removed and hauled away, and the new ones installed.


The washer developed a problem a few months ago. Although it was 1 1/2 years old Costco gives a 2-year warranty. To make a long story short (many hours over many days) Whirlpool refused to honor the warranty. They said the Whirlpool warranty was one year. If Costco gave me a two-year warranty it was up to Costco to honor it.


The Reno Warehouse tried to help but was unsuccessful. That is when I went hunting for the Costco Headquarters phone number. I called and was connected to Jennifer Simmons the Buyer for Appliances. Ms. Simmons and her assistants took care of the problem. (Thank you, guys.)


How many other Costco members have needed service for their Whirlpool appliances in the second year of the warranty and, when running into an apparently brick wall, given up and paid for service themselves?


BTW, as a result of this experience I learned that Whirlpool makes the Sears Kenmore appliances. Whirlpool also owns Maytag.



Tripplite LCD1000 Uninterruptible Power Supply


Ok, this one is literally a scorcher.


After I moved here my less-than one year old Tripplite OMNI1000LCD Uninterruptible Power Supply stopped working. I returned it to the Reno Warehouse and immediately bought a new one. In September of this year it stopped working. By then it was over 2 ½ years old and beyond Tripplite’s two-year warranty. I figured that 2 ½ years was about how long the gel-cell battery lasts in Tripplite equipment.


I took it apart to see what size the battery was because there are places on the ’Net where you can buy gel-cells for a reasonable price.


The reason the Tripplite stopped working wasn’t because of the battery. It stopped working because one of the resisters had burned up (Figure 3 and Figure 4) and because one of the other devices (presumably a transistor) had gotten so hot it had unsoldered itself from the printed circuit board. (Figure 3).


If you look closely at Figure 4 you will see scorch marks near the resistor. I am an old electrical engineer and have a great deal of experience with printed circuit boards. Those scorch marks can only have been made by an open flame.


This Tripplite unit burned up and caught fire. It could have burned down my house.


Even if a unit is out of warranty it is not supposed to catch on fire.


I thought Tripplite should know about this.


However, I couldn’t find my receipt to prove to Tripplite that I had actually bought it in a store and had not built it myself and put their name on it. I went to the Reno Warehouse to ask if they had a record of my purchase. They did.


I explained to them why I wanted it and showed them the pictures. They said if I wanted to bring the unit back they would give me a refund even though it was out of warranty.


I said, “ I was hoping you would say that; it’s in the car.”


I brought it in and got a refund. When I turned it in I told the young lady that it was important not to reconnect the battery because there was probably enough energy still in it to cause a fire and that she put tape over the battery terminals. She agreed, and added that she would also put a note on it. She is very smart. She should be the Warehouse Manager.



Figure 1



Figure 2



Figure 3




Figure 4




I expect the Consumer Product Safety Commission ( would consider this a reportable incident and I’m sure Costco has fulfilled its corporate responsibility by reporting it. However, I do not see Tripplite’s name on the CPSC list of recalled products.



And, I guess that’s it.


Goodbye, Costco.


You were great until I moved to Nevada and went to the Reno Warehouse.


Jed Margolin

Virginia City Highlands, NV

October 16, 2008


Friday October 17, 2008


In one of my conversations with Mr. Tote I asked him if the Tire Center had the equipment for working on Tire Pressure Monitoring Systems (TPMS). He didn't answer so I had to assume the answer was, “No.” That is why my article says Costco Tire Centers do not have the equipment for working on vehicles with TPMS. 


This morning I called the Carson City Costco Tire Center and asked if they had the equipment for dealing with Tire Pressure Monitoring Systems. The Associate said, “Yes.”
I asked him if all Costco Tire Centers had this equipment. He said, “Yes.”

If all Costco Tire Centers have this equipment, then the Reno Costco Tire Center must have one. 


Since the Reno Costco Tire Center had the equipment, why didn’t they use it? 


Maybe they did.


The invoice from Nissan of Reno states, “Inspected sensors. No signal from any sensor. Re-registered sensors and erased light. Road tested and checked ok.” (Click here for invoice}


When I spoke to Nissan of Reno on Tuesday afternoon the Service Manager further explained that the sensors had to be reprogrammed (which is probably why they were not transmitting a signal) and they had to be reregistered with the truck.


How did all four sensors get unprogrammed and unregistered from the vehicle?



Friday, August 24, 2008

1.  I have talked to several people in the Tire Industry who are experts with Tire Pressure Monitoring Systems and I do not believe my tire sensors were turned off deliberately.

2.  I believe Costco is serious about dealing with the challenges of working on vehicles with Tire Pressure Monitoring Systems so that problems like mine don't happen in the future.

I settled the matter with Bob Tote, Warehouse Manager of the Reno Costco Warehouse. 

Costco reimbursed me for the original work and the cost of getting my Tire Pressure Monitoring System working again. I also received a $100 Costco Gift Card.

I am still a Costco member.

It wasn't about the money.

Jed Margolin

Virginia City Highlands, NV

October 25, 2008



November 17, 2009


I decided to see if the Reno Costco Tire Center has improved its act so I brought my Nissan Frontier back to have the snow tires put on.


Everything went ok this time.


Afterwards, I had a nice conversation with the Reno Costco Tire Center Manager George Moran.


He said:


1. They are still using the OTC TPMS equipment ( but the equipment has been updated.


2.  There has been more training for everyone.


3.  The Costco Tire Center sells TPMS sensors for much less than dealers charge. This is important because TPMS sensors use an internal battery with an expected lifetime of 7 - 10 years.


Battery life can be less in cold climates or if low tire pressures cause the sensor to be frequently triggered.


Batteries cannot be replaced. You have to replace the entire sensor. TPMS sensors are a rip-off. See the next section TPMS in a Nutshell.


If you keep your vehicle long enough (or buy a used vehicle) you will eventually have to decide whether to spend the money to get new TPMS sensors or to drive around without the benefit of your TPMS.


It would also mean driving around with the TPMS warning light on.


Some people find that disturbing and cover it with a piece of tape.


That means there is an opportunity for someone to sell an attractive piece of tape to cover the TPMS warning light. Even better, it could be a decal. There could be a selection of decals.


You heard it here first.



TPMS in a Nutshell


Here is TMPS in a nutshell. Title 49 of the Code of Federal Regulations Part 571 Subpart B requires that most vehicles be equipped with a Tire Pressure Monitoring System. The schedule for this is a little complicated but my 2007 Nissan Frontier has it.  The rules can be found at the Federal Motor Carrier Safety Administration web site at


A local copy is available here.


The rules do not specify what technology the vehicle manufacturer is required to use. There are several technologies. They are no standards requiring that any systems be interoperable even when they use the same technology. As a result, the systems are different and proprietary. That is why a TMPS Sensor that may contain $5 worth of parts and cost maybe $1 to assemble may cost $100 or more at retail. What started out as a good idea was subverted into a profit center for vehicle manufacturers and dealers. Another term for this profit center is scam.


Here is how a typical wireless sensor appears to work. I think it is how the sensors in my Frontier work:


1.  The sensor is part of the valve stem. It is powered by a small battery which is not user replaceable. When the battery dies you have to replace the sensor.


2.  In order to conserve battery life the tire pressure signal is transmitted only every 10 minutes, and only if the tire is turning. That is why, if the TPMS light indicates low tire pressure, after you inflate the tire you have to drive the vehicle for 10 (or 20) minutes for the TPMS warning light to go out.


3.  In order to allow it to be serviced, there is a low-frequency receiver built-in. When the proper coded signal is received, it triggers the transmitter so you do not have to wait 10 minutes and have the tire turning.


4.  The signal that is transmitted by the sensor also sends an identification code that is unique to every sensor. This is how the vehicle’s TMPS receiver knows the signal is coming from your tires and not from the tires on another car.


And there is a problem here. How does the vehicle’s TMPS receiver know which sensors are yours?


There are two methods:


1.  The dealer has a special piece of equipment to program the vehicle’s TPMS receiver with the proper sensor ID numbers.


2.  Somehow, the vehicle’s TPMS receiver acquires the sensor IDs from the sensors automatically. It’s called Self-Registration.


If Self-Registration doesn’t work you have to use the special equipment to register the sensors manually.



Here is another problem. Although TPMS is connected to the vehicle's onboard diagnostics system (currently OBD-II) the codes are a secret. That means you cannot use a standard (and cheap) diagnostic scanner to work on the TPMS system. You need special (and expensive) equipment for that.


And, here is what Bartec (a leading manufacturer of TPMS test equipment) says about Tire Pressure Monitoring Systems Tools:   I have underlined some parts that I feel are especially important.


What is a tire pressure monitoring tool?


There is no common standard for the TPMS sensors with variations including frequencies, modulations, data structure, communications protocols, mechanical fitment and many other factors. When TPMS is installed and tested in the car plant by Bartec the process includes:

  • The TPM sensors are attached to the wheel during the Wheel and Tire assembly process
  • The wheels are attached to the vehicle. This is the first time at which the TPMS can be clearly associated with the vehicle.
  • Fixed radio antennas are used to extract the unique IDs (and other data) of the TPMS, associate them with their wheel position on the car and the Engine Control Unit (ECU) can then be programmed with this data.
  • The car is then run through Rolls Test where the system is tested.

Similarly the car dealer needs to have a portable TPMS tool available to read the wheel sensor ID and program the car's ECU in the event of TPMS battery failure, broken sensor/valve, or other repair or replacement of wheels and sensors for custom wheels, winter tires, tire rotation etc.

A good TPMS tool should have the following features:

  • The ability to audit the vehicle before the wheel is broken down - This entails using the tool to activate and read back the data from each TPMS sensor. The tool needs to know all of the different low frequency wakeup patterns to transmit to activate the sensors on each type of make/model/year combination. It will need a vehicle look up table for all of these combinations. The tool needs to establish whether each sensor is working or not. This is an important first step because the legislation dictates that the moment the wheel is broken down the responsibility for fixing the problem passes to the dealer. Many dealers have found that customers will not accept the costs for repair and may attribute any breakage to the dealer if there is no audit trail. The Bartec tools offer the capability to show the customer the audit results from the screen or to download them to a PC and print this pre-audit so that a cost can be agreed and the go ahead given before work commences. The tool should decode the signal and be able to vary its activation power level according to the TPMS fitted. To do this it will need to know all of the decode algorithms for all of the different sensors on the market. This is very important in order to avoid picking up the transmission of other TPMS sensors, key fobs etc. It is important to limit your liability for any problems which occur.
  • Diagnose faults - The TPMS tool should be able to decode the transmission from the sensor and display the data. This will enable the technician to establish if the sensor has failed or is not fitted, whether the pressure port on the sensor is blocked, where the part is running at too high a temperature and other diagnostic information which might be included in the specific sensor (e.g. if there is a low battery condition on the TPMS).
  • Support the replacement of TPMS sensors and the reprogramming of the car - If a sensor proves faulty or is damaged then it will need to be replaced. This requires a new sensor to be fitted and the ECU to be reprogrammed with its unique ID and its position on the vehicle. The procedures for all vehicles are illustrated in the Mitchell1 Tire Pressure Monitoring Systems Guide which shows service requirements, reset procedures, dismounting/mounting instructions, torque specifications etc for all makes/models and years. Most vehicles manufactured in North America have an in-vehicle relearn mode which enables the vehicle to relearn the TPMS IDs when the tool is used to activate the sensor. Not all vehicles may be placed into a re-learn mode (most Asian and European vehicles do not have this feature) and for these the TPMS tool must have an extra interface to the vehicle OBDII/CANbus to communicate with the vehicle engine management or Control Unit (ECU or EMU) and download the TPMS data. The Wheelrite TECH400 has this feature.
  • The TPMS Tool needs to be able to turn off the TPMS warning light - The tool should ideally display the Service kit number and the replacement part number for the TPMS sensor to ensure the correct part is fitted.
  • Software updateable - New TPMS variants are emerging at an ever faster pace. It is vital that the tool can be updated using a USB cable or similar via a PC with latest TPM variants and all other attributes required to continue servicing new models. Bartec get this information long before other competitors and so users of our tools always have the most up-to-date software.

For further detail on the Bartec range of TPMS tools see Products and/or call our technical help desk on CALL toll free (866) 407-TPMS.


March 9, 2012


This is an update on Costco Tire Centers.


In January 2012 I sent a fax to Costco’s new President, Craig Jelinek. It was about another experience I had had with the Reno Costco Tire Center.




Dear Mr. Jelinek,


I am a longtime Costco member. You acquired me when you merged with Price Club back in the 20th Century.


Last May (2011) I went to your Reno Costco Tire Center to have the Bridgestone Blizzak snow tires on my almost-new 2011 Subaru Legacy changed out with the regular tires (the ones that came with the vehicle).


Your Tire Center refused to provide the service, saying it was because I hadn’t bought either set of tires from Costco. Your Associate said it was something about liability.


I will note that:


1.  I obviously could not have bought the vehicle’s OEM tires from you;


2.  You sell Bridgestone tires, and sometimes you even sell Bridgestone Blizzak snow tires, so you must know how to properly install them.



Is this still Costco’s policy?



For the fax click here.



On February 2, 2012 I received a telephone call from Chris Corbin who said he was responding to my letter.


He confirmed that it was, indeed, still Costco’s policy.


I asked him to send it to me in a letter.


He agreed, and promised he would send it out the following Monday, which would have been February 6.


He didn’t do it.


Instead, I received an email from Mr. Corbin which said:


Dear Mr. Margolin,


I am responding to your letter to Craig Jelinek.  Consistent with Costco's policy, and assuming no issues with wear, suitability and the like, Costco will happily install tires you purchased from Costco onto your vehicle. 




Chris Corbin


His answer is evasive and does not answer my question. For a reproduction of his email click here.


So I sent another fax to Jelinek to give Costco another chance to be honest with me. For that fax click here.


I sent that fax on February 13, 2012.


It is now March 9, 2012 and I have not received a response.


Why would Costco have a policy that potentially affects all Costco members and refuse to admit, in writing, to having it?


I can think of several possibilities:


1.  Maybe Costco knows (or suspects) that their policy is an illegal tie-in. Unless you buy your tires from Costco they will not sell you the service of changing them out. (Presumably, the Bridgestone Blizzak tires that Costco sells are the same Bridgestone Blizzard tires that everyone else sells and Costco’s tire-changing equipment is the same tire-changing equipment that everyone else uses, so they don’t have that excuse.)


If Costco’s tire policy is an illegal tie-in, it is not a traditional tie-in. A traditional tie-in would be that:


a. If you buy tires from Costco you would have to agree that only Costco may change them out, and


b.  Costco charges more for changing out tires than everyone else.


This is the opposite of that.


Still, consumers are harmed by their policy because in the Reno area everyone else charges more for changing out tires.


I had my tires changed out at the Firestone dealer where I bought the Bridgestone Blizzak tires. As far as I know they will change out anyone’s tires regardless of where they were bought.


They charge more for changing out tires than Costco does. I was harmed by this.


Note that Costco does not advertise their policy. Am I the only one who was caught by surprise by this unadvertised and unwritten policy?



2.  Maybe Costco isn’t sure if their tire policy is an illegal tie-in and by refusing to state their policy in writing they are giving themselves plausible deniability. You only get paperwork for a service that is performed. Because they refused to provide the service there is no paperwork.



3.  Maybe Costco’s attorneys have assured them that their tire tie-in is legal but they don’t want to risk another class-action lawsuit.



Another Class-Action lawsuit?




A few months ago I received a letter informing me that I was the member of a class-action lawsuit against Costco because I bought gasoline from them between January 1, 2001 and April 22, 2009. Here is Costco’s notice:


For a mirror copy click here.


The results of the class-action lawsuit are essentially:


a.  The attorneys who brought the action were paid for their time;


b.  Costco has put stickers on their pumps stating that the price of the gasoline is not adjusted for the energy content of the gasoline which changes with temperature.



The attorneys who brought the action are Horn Aylward & Brany, LLC:


According to their Web site, one of their practice areas is Class Action Litigation.


Complex/Class Action Litigation


Horn Aylward & Bandy, LLC is continuing to expand its presence, both regionally and nationally, in the complex litigation and class action liability arena. Our clientele in such matters range from consumers defrauded by corporate activity, to businesses subjected to antitrust activity and unfair competition. The subject matter of these actions cover a broad range of topic areas, including unfair marketing and sales practices, breach of insurance policies, unsafe and mislabeled medical devices and consumer products and fraudulent consumer transactions. The members of our experienced Complex/Class Action Department have served, and continue to serve, as lead counsel or co-counsel in dozens of high-profile cases involving millions of claimants across the country.


For further information, please contact Bob Horn at or Joe Kronawitter at


Perhaps Costco is afraid that Horn Aylward & Brady will take another whack at them.


Note that Horn Aylward & Bandy has other areas of practice. It appears that their major practice is in defending physicians, nurses, hospitals, and nursing homes in medical liability cases.


Horn Aylward & Bandy, LLC. specializes in civil trial work. The attorneys at HAB primarily practice in the areas of medical liability (including the defense of physicians, nurses, hospitals and nursing homes), products liability, trucking industry litigation, construction law, business litigation and class actions.


The firm mainly handles cases in the state and federal courts of Missouri and Kansas and tries cases in both states. In addition to trial work, the firm represents its clients in appellate proceedings and appears in the courts of appeals of Missouri and Kansas, as well as the United States Courts of Appeal. Modern day trial practice also includes participation in alternative dispute resolution proceedings, and HAB's attorneys have extensive experience in mediation and arbitration procedures


(If you are fans of the TV show Greys Anatomy you will consider Horn Aylward & Bandy the good guys.)



For a good discussion of illegal tie-ins go to the article The Tie-In Decision - The current state of the law and economics of tie-in sales and the implications for the business manager by Paul Gift, PhD  at



Jed Margolin

Virginia City Highlands, NV

March 9, 2012