1. Rue Jenkins Assistant Treasurer Chairman, AFP Payments Advisory Group November 5, 2009

2. Responsibilities US Banking, Foreign Exchange and Investment Management Relationships All payment products; inbound & outbound Armored carrier & ATM relationships Bank transaction discrepancy research Review and Assess new products International Corporate Treasury liaison Chairman, AFP (Association for Financial Professionals) Payments Advisory Group

3. Costco Today 3 rd Largest retailer in U.S. Stores Magazine, July ‘09 9 th Largest retailer in the world Stores Magazine, January ‘09 560 Warehouses worldwide: –407 US77 Canada21 UK –32 Mexico7 Korea6 Taiwan –9 Japan1 Australia

4. Inbound Payment Tenders Cash/ Check DebitAmex/ Pvt Label Visa/ MC Other WhseYesPINYesNoYes GasNoPINYesNo E-ComNoSigYes TravelNoSigYes No

5. Outbound Payment Types Pmt Type2/20048/2009% Change Mdse Check 36,42243,13718.4% Mdse ACH2,1458.440393.5% P/R Check42,01633,339(20.7%) P/R ACH131,560205,72856.4%

6. Payments Today “The results of the 2009 AFP Payments Fraud and Control Survey show that payments fraud is rampant. These results also underscore the importance of fraud control measures to mitigate risk and reduce exposure to losses from emerging assaults to payments.”* *http://www.afponline.org/pub/pdf/2009_Payments_Fraud_Survey.pdf

7. Attempted or Actual Fraud Payment MethodsAll Respondents Checks91% ACH Debits28% Consumer debit/credit cards18% Corporate/commercial P-cards14% ACH credits7% Wire Transfers6%

8. Check Volume Declining Use of checks is declining Number of checks used for payment fell by 7 billion between 2003 and 2006* $15,200 - 2008 median fraud loss** $13,900 – 2007 median fraud loss * http://www.frbservices.org/files/communications/pdf/research/2007_payments_study.pdf http://www.frbservices.org/files/communications/pdf/research/2007_payments_study.pdf ** 2009 AFP Payments Fraud and Control Survey

9. Who Can Help Me Now? Significant Check Fraud –8/24/2009 through 10/22/2009 –67 items from 17 states –Range of $1,489 to $9,000; 1 check $256K –Payable to individuals –3 individuals received multiple checks –Checks sent UPS with Tracking Number –No hard dollar losses, controls in place

10. Watch Out For This One! 10/15/2009 Letter from HP Security –HP identified impersonation fraud scheme –Perpetrator impersonates HP finance officer –E-mail communication to reseller to change AP remit bank account & routing numbers –Other technology companies impersonated –HP notification on letterhead with current account and contact information

11. Challenges Being hit from all sides; bricks & mortar, gas stations, e-com and corporate Harder to monitor corporate attacks Education of staff critical Protect accounts with filters and blocks Verification of bank account information

12. Thank You Rue Jenkins Assistant Treasurer Costco Wholesale Corporation 999 Lake Drive Issaquah, WA 98027 425-313-6124 rjenkins@costco.com