History

Imagine your favorite toy store belonging not to a single wealthy owner but to all the children who shop there. Every year the store tallies its profit and gives a portion of the money back to its customers. Sounds like a fairy tale? In Seattle, an American city, a store like that has existed for nearly 90 years — except it doesn’t sell toys, it sells tents, backpacks and everything for hiking. It’s called REI, and its history is a real battle between engineers and ordinary people for the right to do business honestly.

In 1938 a group of climber friends grew tired of overpaying for gear. They decided: let’s create our own store where every customer becomes a co-owner! Pay a small fee (now $30 for life) — and you’re no longer just a customer but a member of the cooperative. That means at the end of the year the store shares part of its profits with you, you can vote on important decisions, and the store works for your benefit rather than for enriching shareholders. By the end of the 20th century REI had become a huge chain with millions of members, but it remained true to its principle: profits to the people, not investors.

When greed knocked at the door

In the 1990s, when REI became very successful and well-known, problems began. Business consultants in expensive suits came to management and said: “Why are you giving money back to members? Become a regular corporation, sell shares on the stock market, and top managers will get rich!” Some large companies offered to buy REI for billions of dollars. Even inside the company there were people who thought: maybe it’s time to “grow up” and be like everyone else?

This was a dangerous moment. Across America cooperatives were turning into ordinary corporations one after another. Owners of small shops were selling their businesses to big chains. It seemed the idea of a “store for everyone” was outdated and couldn’t compete with greedy but efficient corporations. REI stood at a crossroads: preserve its soul or chase big money?

But then engineers and creative thinkers at the company stepped in. They realized: to protect the cooperative, it wasn’t enough to talk about values — they needed to build a system that would prove that sharing is more profitable than being greedy.

Engineering fairness: how to build a store-family

The REI team devised a brilliant plan. Instead of simply handing out dividends (the money a company returns to its owners), they turned membership into a real adventure. Engineers created a computer system that tracked every cooperative member’s purchase and automatically calculated their “dividend” at year’s end — usually about 10% of what they spent. But the smartest part was something else.

They launched the “REI Adventures” program — hikes and expeditions organized by the store itself. Co-op members received discounts on these trips. Free courses appeared: how to pitch a tent, how to read a map in the woods, how not to get lost in the mountains. Stores built special stations where you could test boots on an artificial slope or check a tent under a shower rain. All of this was available only to members.

Engineers also developed a voting system: each year co-op members elect the board of directors — the people who make important decisions. Technically this was not easy: they had to organize fair elections among millions of people! But they succeeded by creating a secure online voting platform.

The result exceeded expectations. People felt: this really is their store. A woman from Seattle told this story: “When I received my first dividend check for $47, I cried. For the first time in my life a company gave me money back simply because I bought from them. I realized: I am not just a customer, I am a co-owner.”

Numbers that beat greed

By the early 2000s it was clear: the experiment worked. While regular stores lost customers due to poor service and high prices, REI grew. Co-op members proved to be five times more loyal than ordinary shoppers at other stores. They spent more, returned more often, and brought friends.

Here’s how the success looked statistically:

But the most important thing wasn’t the numbers. REI proved that business can be successful without turning people into a profit source. Engineers and managers at the company showed: if you treat customers as partners, they will respond with loyalty. If you share profits, those profits grow rather than shrink.

One of the REI engineers who worked on the dividend system said: “We didn’t invent anything supernatural. We just built a machine of fairness. Computers calculated fairly, the system worked transparently, and people saw it. Trust can’t be bought, but it can be programmed into the very structure of a business.”

Why this matters to all of us

The story of REI is not just the story of one store. It’s proof that greed isn’t the only way to do business. In a world where huge corporations often forget people while chasing profit, REI showed: you can do things differently and still win.

Today, when you walk into an REI store in Seattle or any other American city, you don’t just see shelves of goods. You see the result of a battle won by engineers, programmers and ordinary people who believed in fairness. They protected the idea that business can belong to everyone, not just the chosen few.

Maybe someday you’ll create something of your own — a store, a company, or a project. Then remember REI’s story. Remember that the most enduring things aren’t built on greed but on trust. That sharing doesn’t mean losing but multiplying. And that sometimes the smartest engineering is the engineering of human relationships, where everyone feels important.

After all, REI proved a simple truth: a store that belongs to everyone cares for everyone. And that’s not a fairy tale — it’s a reality built with both mind and heart.

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