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There could be a Walmart gift card worth up to $100 in your future. The retail giant has agreed to settle a long-running class-action lawsuit, providing gift cards as compensation for certain customers who were charged too much sales tax when using coupons.

If you qualify, the window to claim your share of the settlement is now open. But don’t count your cash just yet.

The settlement pertains to shoppers who used a coupon when purchasing a taxable item at any Walmart store in the state of Pennsylvania, from June 8, 2007 through April 15, 2015. Pennsylvania is one of five U.S. states (Connecticut, Massachusetts, Missouri and Texas being the others) where sales tax is levied on your out-of-pocket total after all coupons are applied, instead of to your pre-coupon total.

That’s not what happened to Verona, Pennsylvania resident Brian Farneth back in 2013. He used a “buy one get one free” coupon for Gillette shaving gel at a Pittsburgh Walmart, when purchasing two items priced at $2.97 apiece. But he noticed he was charged sales tax on the full value of the items, $5.94, instead of on his post-coupon total of $2.97.

So he sued. And the dispute has dragged on ever since. The case was certified as a class action earlier this year, so potential class members were notified of their eligibility. But the case appeared headed for trial, until Walmart agreed to settle the dispute, without admitting any wrongdoing.

“The parties believe that a reasonable settlement, as opposed to the uncertainty of years of vigorously contested litigation involving factual and legal issues, is in the best interest of both the class members and Walmart,” the settlement agreement reads. The two sides agreed to mediation in August, a judge approved the preliminary agreement last month, and the claim period began last week.

If you believe you were overcharged at a Pennsylvania Walmart, you can file a claim by visiting walmartcouponclassaction.com by November 22nd. Walmart has set aside up to $45 million to reimburse eligible shoppers with a gift card valued between $30 and $100, depending on how many claims are filed. And that’s regardless of how much you were actually overcharged – in Farneth’s case, it was just 21 cents. So a $30 gift card for a 21-cent overcharge is a pretty good deal.

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Thankfully, you don’t need to produce a receipt from as far back as 2007 to prove that you were charged too much tax. But you do need to provide some details, under penalty of perjury, about the products you bought with coupons, and the specific Walmart location(s) where you bought them.

And then you wait.

The judge in the case will have to give final approval to the agreement before any gift cards are handed out. And part of the agreement states that Farneth is to receive $50,000 for his troubles, and his lawyers are to receive $15.9 million. If anyone objects to those totals, or any other aspect of the settlement, the two sides will have to hammer out a revised agreement.

Consider what’s happened with the StarKist tuna settlement, in which the company agreed to pay compensation to consumers who bought underfilled cans of tuna. A “final fairness hearing” – one of the last steps in finalizing a class action settlement – was held nearly three years ago. But there’s nothing final about the settlement just yet. As claimants continue to wait, and the litigants continue to argue, funds for affected consumers have yet to be handed out.

So Walmart shoppers may face a similarly long wait before their gift cards are in the mail. But if you qualify for a gift card, consider yourself lucky that you will, eventually, get anything at all. Because the argument that Farneth made has been put forth by many others before – and most who’ve done so haven’t gotten a dime.

Many retailers similarly accused have argued, and judges have agreed, that they’re simply acting as agents of the state in collecting sales tax on the state’s behalf. So the proper way for consumers to be reimbursed any excess tax, is to apply to the state for a refund. That’s what a judge in New York decided in a case against Costco just last week. It’s a cumbersome process and unrealistic to expect every shopper to apply for a refund every time they go shopping with coupons – but it’s the law.

In this case, though, the judge disagreed with Walmart’s argument that it was blameless, since Farneth claimed that Walmart was acting intentionally and deceptively. “These claims are based on allegations that rise above improper tax calculation, e.g., intentionally deceptive conduct,” the judge ruled.

And that key ruling likely prompted Walmart to agree to settle the case, rather than battle it out in court.

So if you file a claim, watch for a gift card to show up in your mailbox one of these days. And if you use coupons when you pay with your gift card at Walmart, better keep a close eye on your receipt – just in case.

8 Comments

  1. I have used many coupons at Walmart I lost out on much money

  2. Aida Medeiros says:

    Of all coupons
    Did not know i was over charged

  3. I thought to myself that they charger too much on different things on the taxes some price be too much but I want it so I buy it

  4. I never knew they was over charged
    Me

  5. Karen Y Middlebrooks says:

    I never realized I was being overcharged.

  6. Sheilda Stevens says:

    I have used many coupons at walmart. Yet i Never realized before now all the money i actually lost.

  7. This would mean that in those States, Walmart will have to have a different system in place for coupons to ensure the tax is applied to the amount after the coupon and not before…since the norm elsewhere (even here in Canada) is to apply tax on the full value before coupons are applied.

    However, I know here in Canada, the government does not expect tax to be collected on a free item…but the system isn’t set up to not calculate tax on the free item so the cashiers have to (and unfortunately many do not) figure out the total with the tax, and then input that as their coupon value (now, whether they get that amount back from the manufacturer is a different matter since the manufacturers often do not pay the sales tax period).

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