Restocking fee assessed dishonestly?

September 14, 2006 10:08 AM

Restocking fees: I bought a Mac Mini right before the new ones were announced, etc. etc., open-box restocking fee. I think their mechanism for assessing the fee is dishonest ...

I purchased the unit for $570 for a total bill of $611. The associated 15% restocking fee would be $85.50, for a difference of $525.50. However, the clerk insisted it was both store and state (Wisconsin) policy that the mechanism was to assess the 15% "fee" by refunding 85% of the merch, leaving them with the missing 15%. But in so doing, they also only pay me for 85% of the sales tax, leaving me in the lurch for the tax on the other 15%. (In this case, their offered refund was $519.) It's not that it's a lot of money in this case, but I would think would add up to a lot of squishy revenue for a big box retailer. To me, it's inaccurate to call this 15% withholding a "fee," since it isn't treated like a fee (because paying that flat fee would have left me with $525), but more broadly, I suspect that the clerk I spoke to was wrong about the law. Any takers?

posted by blueshammer to Shopping (9 answers total)

In effect the store is still liable for the tax on the unit, in this case a restocking fee, is it not?

Are you expecting a full refund of 85% of the ticket price ($484.50), and the full tax ($41) for a total of $525.50.

Their method seems to make sense honestly, and seems fair.
posted by SirStan at 10:12 AM on September 14, 2006

I looked through the Wisconsin tax documents and cannot find any reference to restocking fees, however I would assume that the 'restocking fee' is a service, and taxed as any other service would be.
posted by SirStan at 10:18 AM on September 14, 2006

The store could "eat" the tax on the restocking fee. They could also could have made it 5, or 10 percent. They chose 15 and to calculate tax on top of it (like, in fairness, practically every American financial transaction).

Returns are one of the reasons you're better off buying Apple products from Amazon, I hear. (Another is giving the referral to a Mac site you like.)
posted by Doctor Barnett at 11:20 AM on September 14, 2006

if it is an actual 'return', then they need to refund 100% of the tax. Anything else is stealing.

If it is the store 'rebuying' the item at a 15 % discount, then you should be collecting the sales tax from them.

i think it's the former. if they are accepting a return, they need to pay 85% of the item's cost, but 100% of the sales tax. they are making additional money off of your transaction.

and, for the record, i do not shop at places that charge me 15% to return something.
posted by lester's sock puppet at 11:56 AM on September 14, 2006

Response by poster: Well, I can't fault them for the charge in this case, because it's not defective. It was a computer that got 14 days of mildly intensive use. I was stupid not to do better intel about the situation prior to the purchase, such that I might realize that a new model was imminent. The fact that Apple abandoned the solo processor altogether especially made me feel like a real chump for getting one, and this is a computer I hope to use for years to come, so, OK, I'll sell the computer back to them for $480; it's more than I could hope to sell it for on the open market, and I'd prefer not to have it.
posted by blueshammer at 12:02 PM on September 14, 2006

Response by poster: (When I say that it's more than I could hope to sell it for, I mean I don't have the patience to try to sell it properly via Craigslist, eBay, etc. Whatever the price differential is between $480 and the price I could expect to get for it, which I don't think could be more than $40 in any circumstance, I'm happy to forfeit so I can forego the effort.)
posted by blueshammer at 12:04 PM on September 14, 2006

I concur with lester and I suspect WI would as well. If they are refunding payment then they must refund the tax collected on that payment as well. After all, the state defines it thusly:

The Wisconsin sales tax is a 5% tax imposed on the gross receipts of retailers (emphasis mine) who sell or lease tangible personal property or provide taxable services in Wisconsin.

If they sell one widget for $10 and refund one widget for $10 then their gross receipts are $0.

You should call or email the WI board of revenue (or just say you're going to)

WISCONSIN DEPARTMENT OF REVENUE
Customer Service and Education Bureau
P.O. Box 8949
Madison, WI 53708-8949
Phone: [phone]
Fax: [phone]
[e-mail]
posted by phearlez at 12:40 PM on September 14, 2006

But by phearlez's logic, if they sell one widget for $10 and refund one widget for $8.50, then their gross receipts are $1.50, and the application of sales tax to the restocking fee is correct.
posted by misterbrandt at 12:58 PM on September 14, 2006

I think misterbrandt is on the right track, but remember that the restocking fee is for a service. If the sales tax applies to services, then you've got to pay the tax. If the sales tax applies only to goods, then you don't have to pay it. Sadly, I do not have the motivation to research the ins-and-outs of Wisconsin sales taxes, so the rest is up to you.

Of course, you could just call the Dept of Revenue, as phearlez suggests, but instead of dobbing on the store, just ask them for clarification. Get the right answer from the experts.
posted by robcorr at 9:22 PM on September 14, 2006