Diagnosis
The spring mechanism inside the cord reel has either failed or, more likely, gotten jammed with dirt, sand, or grass clippings. It's a common issue if you use the washer on a lawn or driveway.
How to Fix It
Unplug the machine. You'll need to access the reel. On the K1700, the reel is part of the main housing. Carefully tip the machine on its side. Use a brush and compressed air (or a vacuum with a nozzle) to clean out all the debris from around the reel's central spindle and the gaps where the cord enters. Manually wind the cord all the way in, then pull it all the way out a few times to see if it loosens up.
If That Didn't Work
If cleaning doesn't help, the rewind spring itself is probably broken. This isn't a user-serviceable part on most units. You can continue to use the machine by manually wrapping the cord around the storage hooks on the housing, but the auto-rewind function will be dead.
Heads Up
When unwinding the cord for use, don't just yank it violently to its full length. Pull it out smoothly and try to avoid dragging the cord through mud or wet grass, which introduces the gunk that jams the reel in the first place.