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Costco sues state over $3 million in unclaimed customer rebates By VANESSA HO SEATTLEPI.COM STAFF



When customers fail to cash in on rebates, where does the money go?

That's the subject of a lawsuit filed by Costco last week, alleging that it shouldn't have to pay Washington $3.2 million in unclaimed rebates.

The complaint followed a state order last month directing the Issaquah wholesaler to pay the unclaimed money to the state Department of Revenue.

The order said the funds belong in a state-managed program for consumers who want to claim the rebates.

Costco paid the money, but said it shouldn't be on the hook. In a complaint filed in King County Superior Court on Friday, the company said it uses third-party companies to handle its rebate programs, and that it doesn't keep the money.

Costco also complained about how it got the bad news. It said the state had sent a bill with less than 30 days to pay up, with a "terse" statement that included a threat of monetary fines and prison, and no opportunity for appeal.

The $3.2 million represents unclaimed Costco rebates from 2004 to 2010, plus interest.

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