Have you ever bought something from a store and excitedly take it home with you, but then soon discover you no longer like it or find the same emotional excitement from it as you did when you first purchased it? So then you decide to return it to the store in the same condition, but then get distracted and find yet another ‘feel good’ item that you want to purchase?

So there you are at the register wanting to make a ‘return’ and a ‘purchase’ but the store employee processes it as an ‘exchange’? Don’t let this happen to you. Make sure your ‘exchange’ is truly an ‘exchange’. A good example of an ‘exchange’ is you know, when you buy a certain pair of jeans hoping the one size fits but when you get home you find out you do really need one size bigger. That would be an even ‘exchange’ as long as you exchange it for the same brand and at the same original cost. That is comparing apples to apples, but what I’m finding is that retailers are comparing apples to oranges which is to their benefit -- and not to yours. There’s a real money lesson here to be learned. You need to pinch your pennies, because the retailers are pinching yours!

I have had the following scenario happen to me three times in recent months at three different retailers. I am starting to wonder if this is becoming the new norm of retailers to increase their bottom line. Perhaps it is an honest mistake, oversight or a result of improper training. Perhaps it is the new scam due to today’s economic situation.

Recently, I found myself in need of purchasing a new peripheral for my computer. I visited a local store and purchased this new unit. Armed with my persuasive coupon (and the real reason why I chose to buy from this particular store), I was pleased with my savings and went home with my new product. At home, I read more about the product on-line and determined this would not suffice my needs. Unopened and in its original packaging, back it went, so I could return it and purchase a different model that would better suit me. I presented my receipt to the store clerk to return the unit and purchase a completely different one. The clerk processed it as an ‘exchange’ which literally cost me money. Let me explain below and see if you catch the accounting error.

The first item’s original cost is $100.00 but you have a coupon which yields you a discount of $15.00. The discount reduces the cost of the item to $85.00. Now add 7% Georgia sales tax of $5.95 and the total cost you pay is $90.95. Later you decide to return it and buy something similar, yet not the same. In fact, the other item you want might even cost you more. The new item you want costs $180.00 and at the store, the clerk processes this as an ‘exchange’ rather than a ‘return’ and a new ‘purchase,’ as it should be. So, the clerk gives you a credit of $85.00 (the discounted rate from your first purchase because you’re still eligible to use the original coupon), rings up your new item of $180.00 and then adds 7% GA sales tax ($6.65) for a new total of $101.65 that you pay.

Did you catch the error? What about the $5.95 in sales tax you paid from your original purchase? You should have been credited the original sales tax you paid on the item you are returning. That’s more pennies in the retailers’ pockets. The second error here is that if the item was rung up properly, you would have paid less than $101.65.

Here’s the proper way the item should have been rung up. The original cost of the unit is $180.00, less the full credit of $90.95 from your original total purchase (which includes the $15.00 discount and a full credit of sales tax previously paid) thus reducing the cost of the item to $89.05, then add 7% GA sales tax of $6.23 making the total cost you pay $95.28, rather than $101.65.

This type of practice of processing ‘exchanges’ when really not an even exchange is essentially double taxing consumers.

A few pennies from every consumer this happens to might equate to enough dollars to help the retailers hit their quarterly sales numbers. I don’t know about you, but I need those extra pennies to drive myself to the retail stores in the first place.

Signed,

Pinching Pennies