If you don't want to send it back, the fix is easy:
Unscrew the reel nut all of the way down. Get some teflon tape and wrap the threads tightly in a clockwise direction (if you wrap counter clockwise, the tape will unravel when you screw the nut back up)
The tape takes up the clearance between the threads and the nut (knob). As teflon tape has no adhesive, it can be removed whenever you want and won't leave any residue.
By the way, the reel seat components are made by Fuji, not St. Croix.