Sales tax snafu in Edmonds

Westgate QFC overcharged its shoppers during a two-week period
By Brian Soergel | Mar 29, 2018
Photo by: Brian Soergel Charles Hunter’s receipts from March showed that QFC in Edmonds was charging too much sales tax.

QFC in Edmonds admits it overcharged customers on their sales tax between Feb. 26 and March 10 due to an internal error.

Charles Hunter, a retired doctor from Woodway who practiced in Edmonds, brought the pricing error to the store’s attention earlier this month. He said he checked a receipt because he knew that the tax increased in Edmonds earlier in 2017, on April 1, but he didn’t remember what it was.

(Edmonds’ sales tax jumped from 9.8 percent to 10.3 percent, thanks to voter approval of a half-cent increase to support the Regional Tax Authority, Sound Transit.)

Hunter and his wife shop at QFC frequently (which, like Fred Meyer, is owned by Kroger). “That’s strange,” he said he told his wife after inspecting the receipt. “It looks like it’s over 11 percent. I did the math on it. I didn’t think it was going that high.”

He bought one taxable item, about $8, and stared disbelievingly at the sales tax: It was 90 cents, actually more than 11 percent.

(In Washington state, most grocery items, newspapers, and prescription drugs are exempt from sales tax, but junk food, prepared food, dietary supplements and soft drinks are taxable. On the far right of your QFC receipt, taxable items are noted with a “T.”)

Two days later, Hunter returned to QFC and the sales tax was still over 11 percent.

“I thought, am I missing something here? I called up the store and spoke to the manager and was told she didn’t know about it, but would take care of it,” he said. “The next day, my wife comes home with a slip and showed it to me. I thought, OK, they fixed it.

“No. It was still 11.2 percent. So she called up and spoke to a different manager, who pooh-poohed her. ‘We wouldn’t do that,’ he said. ‘Corporate wouldn’t allow that – I’m sure you’re mistaken,’ he said.”

But, according to Hunter, the second manager called his wife later that day to say QFC indeed had made a mistake, and had been charging customers too much. He thanked the Hunters for letting him know.

"We sincerely apologize for our error," QFC spokesman Zach Stratton said last week. “As soon as QFC was made aware of the situation, we took immediate corrective action. The coding in our system has been corrected to ensure accurate charging, and we have completed a review of our tax data to ensure this was an isolated event.”

Stratton said that QFC had identified the impacted customers who used loyalty cards – which give discounts on select items – and would reimburse them for being charged the incorrect sales tax, an average of 31 cents per customer.

"This was an honest mistake where the wrong tax rate was keyed in at this store," Stratton said. "We have since self-audited and found that the tax rates were correct at all of our (other) stores. No other changes needed to be made. I also want to reiterate that any extra tax that was collected was remitted to the state, not kept by QFC."

In previous conversations with QFC, Hunter said he suspected that the overcharging went back to December, but couldn’t locate a receipt to prove it. During a meeting with the Beacon on Monday, he said he'd found it and displayed it.

The receipt shows two taxable items, one for $4.99 and one for $5.99, for a total of $10.98. He was charged $1.21 in tax, which was 11 percent, instead of 10.3 percent.

On Wednesday, Stratton cleared up the misunderstanding. According to Kroger’s headquarters in Cincinnati, Hunter did not notice a $1.34 orange juice purchase that was taxable. It was marked with a “B” on the receipt, meaning “Both.”

That means it is a taxable item and can also be purchased with food stamps, hence the “both.” The orange juice item was taxed on Hunter’s receipt because it was a single-serve beverage that was not 100 percent juice.

But QFC says that, indeed, customers were charged more sales tax than they should have been between Feb. 26 and March 10.

“As previously shared, we are in the midst of conducting a comprehensive review and will share the findings once complete,” Stratton said. “We appreciate our customers’ diligence to ensure that no one is paying too much in sales tax. We are taking this issue seriously and are redoubling our efforts to continue to be the entrusted community partner Puget Sound residents have come to rely upon for the past 63 years.”

Hunter said he will continue to shop at his neighborhood supermarket.

“I very much like QFC,” he said. “It’s a great store. So this was just a little disappointing.”

 

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