Nordstrom and the Tires It Never Sold

The story

Nordstrom began in 1901 as a shoe store in Seattle. John W. Nordstrom, a Swedish immigrant, had come back from the Klondike gold rush with about $13,000 and opened the store, called Wallin and Nordstrom, with a partner named Carl Wallin. Their founding idea was simple: give customers the best possible service, selection, quality and value. The shoe store grew into one of the best-known department stores in America.

Over the years, Nordstrom became famous for how its salespeople treated customers. Rather than a thick rulebook, employees were reportedly handed a single card with one rule: "Use good judgment in all situations." The company's message was that the people on the sales floor knew best how to help the person in front of them.

The most famous example is the tire story. In 1975, Nordstrom bought three stores in Alaska from a local company called Northern Commercial. Northern Commercial had sold all kinds of things, including auto supplies. Nordstrom changed the stores to sell clothing and shoes. Nordstrom has never sold tires, not in Alaska and not anywhere else.

As the story goes, a man walked into the Fairbanks store one winter day rolling two tires. He said he had bought them in that very building and had been promised he could return them anytime. A young employee named Craig Trounce had no way to look up the price, so he called a tire shop to ask what the tires were worth, then gave the man that amount in cash, reportedly about $25. Trounce later joked that he mostly wanted to get the dirty tires away from the shirts.

For years, many people assumed the story was made up. It spread through business magazines and books in the 1980s and 1990s, and some versions changed the details. A 1988 Washington Post article even reported that Nordstrom officials called it apocryphal, meaning probably not true. The fact-checking website Snopes concluded it was most likely a legend. But later, members of the Nordstrom family said it really happened. In a company podcast, Pete Nordstrom said, "The tire story did happen," and named Trounce as the employee. A Fairbanks newspaper interviewed people involved and placed the event in the winter of 1979.

Was it smart business to refund money for something the store never sold? On its own, it cost a little money. But the story has been told so many times, in so many books and classrooms, that it has probably been worth far more than $25 in goodwill. More importantly, it showed employees what the company valued: treating customers with respect, even when they are confused, and not hiding behind rules.

There is a balance here. Stores also need return policies that protect them from people who take advantage. Over the years, Nordstrom, like other retailers, has had to set limits. But the lesson for a small business stands. When an honest customer is in a strange situation, the kind and generous choice is often cheaper in the long run than winning a small argument.