On 11/13/2014 12:32 PM, scarecrow wrote:
SMS wrote:

On 11/12/2014 9:03 AM, scarecrow wrote:

I'm late to the party so maybe someone's also mentioned this, but
perhaps Costco figures if someone is dumb enough think they have to
drive miles to top up their tires instead of doing it in the comfort
of their own garage they might also, while there, go in and buy an
impulse flatscreen.

Tires are very high margin items, like mattresses.

If your argument is correct and tires really do last longer with
nitrogen then it appears that Costco is shooting themselves in the
foot since they would have less repeat sales over time, not more.

Costco is one of the few stores that sells tires that actually honors
tread wear warranties. They also include road-hazard insurance rather
than charge extra for it.

Like any business they want to minimize the cost of returns. They get
credit back from the tire manufacturer for tread wear returns but few
people take advantage of this even though they are entitled to. Road
hazard replacements aren't covered by the tire manufacturer, so they
want to minimize them.

If everyone was good about keeping tires properly inflated then there
would be little upside in inflating with nitrogen. They aren't so there is.

Remember, even though some tire stores may charge $5 per tire for
nitrogen, the actual cost to generate that nitrogen is about 1/100th of
that.