Walmart Accused of Shortchanging Customers on Returns

Have you ever bought something from a chain store, and returned it at a different location? It’s a convenience that many stores allow – but sometimes that convenience can come at a cost. Even if that cost is illegal.

That’s the gist of a lawsuit filed in Ohio, against the biggest chain store of them all – Walmart.

At issue, is a grand total of $1.83. That’s how much two Walmart and Sam’s Club shoppers say they were overcharged, by not being refunded the full amount of their purchases when they returned them.

The problem, they say, has to do with different tax rates in different areas where Walmart stores are located. “Walmart systematically shortchanges customers who return products to a store located in an area with a lower sales tax than the store from which the product was originally purchased, by using that lower sales tax rate to calculate the refund, rather than the amount actually paid,” the lawsuit claims.

Plaintiff Shaun Brandewie said he purchased items from Walmart in June 2012, and returned two of them to a different Walmart location, 30 miles and one county away. A $34.97 computer router and a $15.44 compact fluorescent light bulb were taxed at Cuyahoga County’s then-7.75% tax rate when he bought them. But when he returned them in neighboring Summit County, he was refunded the retail price, plus that county’s then-6.5% tax. So he was out 44 cents for the router, and 20 cents for the light bulb.

“Despite his protests to Walmart employees, including an assistant manager,” the lawsuit reads, “Walmart would not refund the entire amount paid.”

And then Brandewie said it happened again at Walmart-owned Sam’s Club just last month. He crossed the county line again to return a memory card that he purchased at one county’s higher tax rate, and was refunded at the other county’s lower tax rate, causing him to be shortchanged 20 cents.

Co-plaintiff John Newbrough alleges that the same thing happened to him when he returned an item to a different Walmart, and was shortchanged 99 cents.

“Walmart has the capability of calculating the correct refund amount, as other major retailers do, but it does not,” the lawsuit claims. “This breaches the sale contract with the customers who are shortchanged.”

The lawsuit seeks unspecified damages, and class-action status, on the presumption that other Walmart and Sam’s Club shoppers across the country are being shortchanged, too. “Even if just one customer per store per year returned a product and was given less than the amount paid in return because she returned it to a different store in a location with a lower sales tax, there would be over 4,700 plaintiffs (per year) for the class,” the lawsuit reads. “Even more potential plaintiffs would come from online sales. When considered over the course of a number of years, the class is even more numerous.”

It might seem to be a cut-and-dry case – at worst, a judge could order Walmart to refund the men’s combined $1.83. But it’s potentially a lot more complicated than that.

Last year, in another case involving Walmart and sales tax, a Pennsylvania man sued the retail giant for overcharging him by 21 cents, by adding state sales tax to his purchase total before his coupons were applied. Pennsylvania is a “post-coupon tax” state, which means tax must be assessed only after coupons are deducted from the total.

Seems straightforward enough. But plaintiffs in other, similar cases have lost, after judges ruled that they should be taking their complaints and requests for reimbursement to the state, rather than to retailers who are merely collecting taxes on the state’s behalf.

So Brandewie and Newbrough may ultimately need to ask Cuyahoga County for their money back. Or Summit County may request that they give back the tax they were refunded but never actually paid to Summit County, and then the plaintiffs will have to ask Cuyahoga County for a refund of the entire amount of the tax they originally paid.

See – it’s complicated.

So complicated for consumers who are unlikely to request tax refunds from local jurisdictions for retail purchases, that plaintiffs in such cases argue the burden should be on retailers to sort it all out on their customers’ behalf. Otherwise, those retailers could end up pocketing millions of dollars by keeping all the spare change for themselves.

The lawsuit does not specify what happens when an item is purchased in a lower-tax county and returned to a store in a higher-tax county. Does the consumer get a refund at the higher tax rate, and make a profit?

Let some less-litigious super saver figure that one out. For now, Brandewie and Newbrough just want their $1.83 back. And if you do any cross-county retail returns of your own – you might want to watch your receipt.