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According to the Courthouse News Service, Wal-Mart has been using a sales tax loophole to swindle customers out of a full refund on returned merchandise. Basically, the lawsuit claims that when customers have purchased items at a store that charges a particular sales tax, and have returned the item at a store in an area with a lower sales tax, Wal-Mart has refused to return the difference in paid tax if the rate at the point of sale is higher than that at the store where the merchandise is being returned.

(Plaintiff John) Whitewall says he bought a Blue Ray disc player from Wal-Mart’s store in Collinsville, Ill. for $214.04, at an 8.1 percent sales tax rate. But when he returned the player to Wal-Mart’s store in Glen Carbon, Ill., he received only $211.56, because that store has a 6.85 percent sales tax.

This seems like such a small issue - $3.50 or $4 dollars on a sale - but multiplied over thousands of transactions it has the potential to add up. Wal-Mart has had similar issues with returns before - late last year the Connecticut Attorney General began looking into Wal-Mart after charges began surfacing that major retailers (most notably Wal-Mart) were violating state law by charging a second sales tax when merchandise paid for with cash was exchanged. You can refresh your memory on that story here and here.

The lawsuit was filed as a national class action, and we’ll continue checking for updates. You can read the complaint here. The lawsuit is seeking actual damages, plus any additional damages the court would deem appropriate - read: punitive damages in an amount high enough to make Wal-Mart consider changing its practices.

It’s unclear if the plaintiff has examples beyond his own - the complaint mentions only the Blu-ray player purchase - but I have to believe they have additional plaintiffs. A class action based on one case is, after all, not really in much danger of moving forward as a class action.

Class Sues Wal-Mart Over Returns Policy [Courthouse News Service]

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The Connecticut Post ran a story over the weekend that serves as yet another signal Wal-Mart is looking to extend its financial services department. The feature focuses on Wal-Mart seeking to expand its check cashing services into Connecticut, announcing in television advertisements that it will cash a paycheck for up to a $3 fee, and hopes to be providing the service within a year in Connecticut, after it gets licensed.

Wal-Mart has actually been in the check cashing business for quite a while now - in 2004 the retailer began allowing customers to cash their pre-printed payroll or government-issued check, including tax refund checks, at designated registers in Wal-Mart Stores and Neighborhood Markets in 44 states. In the others (Connecticut, Massachusetts, New York, New Jersey, Nevada, Rhode Island) Wal-Mart was applying for a license to do so. In 2007, Wal-Mart announced plans to open 1,000 in-store MoneyCenters aimed at serving people without traditional bank accounts, and also debuted a reloadable, prepaid Visa debit card that didn’t require a bank account or proof of U.S. citizenship.

Since then, Wal-Mart has received a check cashing license in Massachusetts, and apparently continues to try for one in Connecticut. As it is, CT allows retailers to cash checks without a license, but they cannot charge more than 50 cents per check. With a license, Wal-Mart could charge up to 2% of the amount cashed, although Wal-Mart has maintained that it will charge no more than $3 per check. It sounds like a modest amount per check, and indeed, it could be a substantial savings over check cashing outlets or banks where charges can reach $10-15 per transaction. Still, this is most likely nothing more than a way for Wal-Mart to attract more sales in its stores, while breaking further into a business retailers have generally shied away from.

Hank Shyne, executive director of the Financial Service Centers of America Inc., was well aware of Wal-Mart’s move and said it is something his group is paying attention to. He added regulations in the various states make it difficult for the retailer to come into the business. But it is a big and attractive market, he said. “There are a lot of people who live paycheck-to-paycheck and need the money immediately,” Shyne said. In New York in 2007, there were 32 million checks cashed worth $16 billion. “Nationwide it’s more like a $160 billion business.”

It wouldn’t be surprising if the ad push is ultimately aimed at getting more people using its MoneyCenters, and its reloadable debit card in particular.

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A pair of stories - infant formula in Texas and continuing tax issues in Connecticut.

First, from Texas. Texas Wal-Marts are asking customers to check the dates on any infant formula sold within the state, after the office of the Attorney General learned that the retail giant had been selling expired product. There doesn’t appear to be a lawsuit on the horizon...the AG’s office simply asked Wal-Mart to remove the expired formula from shelves, inform customers, and make restitution. That most likely means refunds, but state penalties are not out of the question either.

The second story comes from Connecticut, where the neverending double taxation story has gotten life breathed back into it yet again. Here is our most recent post on the subject. And this, from the Hartford Courant:

Sue Drobinski of New Britain says that despite Wal-Mart entering into an agreement to follow state laws on taxes involving even exchanges, its employees in New Britain are not following the law.

I sent her email to state Consumer Protection Commissioner Jerry Farrell Jr. this morning, who has responded that his legal department will contact Wal-Mart to bring up this and other similar complaints.

Read on for more on both stories…

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We thought this story was over last week when Wal-Mart fessed up to charging illegal sales tax in Connecticut. We were wrong.

The Hartford Courant is reporting that, despite acknowledging the wrongdoing and vowing to change its ways when it comes to double-charging sales tax, the message has yet to filter down to, you know, the people that matter. Namely, employees. The following is an excerpt from a letter submitted to the Courant:

I find it absolutely incredible that no salesperson knew the “corrected” policy. I hope the assistant manager refunded my sales tax because she really knew it was the right thing to do, or if she just did it to please the customer.  In any case, I’m happy I got my money back. Of course, it’s not the money, it was the principal of the whole thing. I’m still amazed at the whole thing and it has “tainted” my thoughts of their store and my willingness to continue shopping there.

I’d say this was a one-time deal, and we’ll never read about these sales tax shenanigans again. But…

The Courant has forwarded the complaint to the Connecticut Consumer Protection Commission.

Despite promise of reform, Wal-Mart still violating Connecticut tax laws [Hartford Courant]

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What he said:

Spokesman Dan Fogleman said Monday evening that although he has no idea what Connecticut sales tax law is, his company is following it.

What his replacement would later say after the Connecticut AG asked him to please, try again:

“We thoroughly reviewed our practices and have taken steps to ensure that our associates are fully complying with Connecticut law when processing even exchanges,” [Wal-Mart spokeswoman] Ashley Hardie said in an e-mail.

I don’t know who this “Ashley Hardie” is, or what she did with my main man Dan, but I really don’t care for her “thorough reviews” or her guarantees that “steps are being taken” to insure compliance. In fact, I’d greatly appreciate it if she just started opening her mouth and letting the words flow, much like Dan used to do. Dan was so much more fun. Dan doesn’t know Connecticut law, but did Dan let that stop him? No. No he didn’t. Dan sat in Arkansas and spun tales of big, benevolent Wal-Mart spreading cheer and helping people afford Christmas, completely incapable of breaking any law known to man. And even if they did, he said, its Connecticut’s fault for having such CRAZY laws in the first place. Well, actually, that was Wal-Mart and not just Dan that said that:

Wal-Mart Stores even had posters behind courtesy desks blaming the state for its policy. “State law PROHIBITS Wal-Mart from refunding SALES TAX to any customer returning or exchanging merchandise without an original purchase receipt,” the “tax refund laws” posters said.

Unfortunately, that isn’t what the law says:

However, state tax laws clearly say the opposite, state Consumer Protection Commissioner Jerry Farrell Jr. said Wednesday in an interview explaining the out-of-court settlement he reached with Wal-Mart. State laws mandate that if a company has an exchange policy, it cannot charge a second sales tax on the new item. Wal-Mart’s website clearly says it has such an exchange policy.

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Some site fights bubble and brew for years before erupting. Others seem to just appear overnight, and explode spontaneously. The controversy in Brooklyn is definitely one of the latter.

Brooklyn is a small town of 7,900 in Northeast Connecticut - the “quiet corner” of the state. Residents were stunned on October 22nd when they were informed on WINY radio that a Wal-Mart supercenter was coming to town, and further shocked when First Selectman Robert Engle told residents that the 158,000 square foot project on Route 6 was a ‘done deal.’ Unfortunately, Wal-Mart and Mr. Engle forgot to ask town residents what they thought.

Residents all over Brooklyn were shocked, and have been speaking out about the project and flooding city meetings over the issue.

Local resident Jeff Arends told the Norwich Bulletin:

“I was devastated when I heard that Wal-Mart wanted to come to Brooklyn. I think Wal-Mart is going to destroy our small businesses. It’s just going to drive a stake into them.”

A reader from Brooklyn wrote in to us:

It is has recently been divulged that town officials have quietly been making plans to accommodate the construction of a 24 hour Wal-Mart Super Center on Route 6 in our little agricultural town. Residents were shocked to hear this news as there has been very little public information about such a radical change to our neighborhood. We feel that this project – a 150,000 to 200,000 square foot building is out of portion to the size of Brooklyn with its 7,800 residents. We’ve formed a grassroots group called Brooklyn For Sensible Growth.

Check out the group’s website here - it seems very well organized.

Wal-Mart just formally submitted its application to build a store, but the city still must fully approve it - and there’s still time for residents to speak out against it.

TAKE ACTION NOW!

Send an email to First Selectman Robert Engle and Sherry Soucy - Chairwoman of the Inland Wetlands Commission, which holds a meeting over the Wal-Mart project on December 9th.

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We blogged about this yesterday, what with the double taxation in Connecticut and the various state officials telling Wal-Mart to stop. Well, the Hartford Courant obtained a copy of CT AG Blumenthal’s letter to Wal-Mart, and here it is. A sampling:

Please review with your Connecticut stores whether they are complying with Connecticut law, and report back to me your findings. If they are not complying, please report to me how you intend to refund customers for sales tax erroneously charged, and how you intend to ensure that your store and employees comply with Connecticut law in the future.

I return, yet again, to my favorite quote from yesterday‘s article:

[Wal-Mart] spokesman Dan Fogelman said Monday evening that although he has no idea what Connecticut state tax law is, his company is following it.

Dan and Wal-Mart better do their homework…

Connecticut Attorney General letter to Wal-Mart

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George Gombossy and the Hartford Courant continue to follow this issue, which has taken a turn in favor of the consumer. Numerous complaints made to the Courant caused both Governor Rell and Attorney General Blumenthal to take notice. The complaints were from consumers charging that major retailers have been violating state law by charging a second sales tax when merchandise paid for with cash is exchanged. Governor Rell ordered the state revenue department investigate the practice, and now AG Blumenthal has sent a letter to Wal-Mart telling the company’s general counsel in an oh-so-kindly way to please knock it off with the double taxation.

“Wal-Mart should refund any consumer who was denied a refund of sales tax on returned goods or charged a sales tax on even exchanges,” Blumenthal wrote to Sam Reeves, Wal-Mart’s division general counsel.

My favorite part of this story so far though has come from our good friend, Wal-Mart spokesman Dan Fogelman, who defended Wal-Mart’s policy.

Spokesman Dan Fogleman said Monday evening that although he has no idea what Connecticut sales tax law is, his company is following it.

That’s right - despite his cluelessness to the law and the company’s refusal to discuss why the accusations of so many customers are wrong, Fogelman can guarantee Wal-Mart is following state tax law to the tee. I love blanket statements with nothing to back them up.

Blumenthal Targets Wal-Mart on Sales Tax [Hartford Courant]

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The Hartford Courant has been following this story, and apparently the complaints against Wal-Mart have been increasing. Consumers have increasingly suggested that Wal-Mart has to be violating some state law by requiring them to pay tax again on exchanges made without receipts. Actually, according to the Connecticut Revenue Department, additional sales tax cannot be charged if a store has an even exchange policy. In his blog, the Courant’s George Gombossy came to the following determination:

My conclusion is that not only is Wal-Mart violating state laws by charging tax again without receipts, but is letting its employees falsely blame the state.

Gombossy points out that on its website, Wal-Mart says: “You can replace, exchange, or get credit for an item immediately in a store, pending product availability.”

The issue is now with the state’s Consumer Protection Department.

Consumer Protection reviewing Wal-Mart’s double tax policy [Hartford Courant]

Despite complaints from customers of its stores throughout Connecticut, Wal-Mart insists that it’s following state tax laws by requiring them to pay tax again on exchanges made without receipts.

My conclusion is that not only is Wal-Mart violating state laws by charging tax again without receipts, but is letting its employees falsely blame the state. But you be the judge.

The law seems clear:

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Connecticut Governor M. Jodi Rell is ordering the state revenue department to revue possible tax law violations by major retail chains within the state.

According to the Hartford Courant:

Gov. M. Jodi Rell appears to doubt the state revenue services department’s assertion that it is “on top of” complaints from consumers that major retailers in Connecticut are violating state laws by charging a second sales tax when merchandise paid for with cash is exchanged.

This practice has apparently been the subject of many complaints in the Constitution State, where sales tax cannot be charged on an exchange item if a retailer has a policy of permitting exchanges on identical items purchased with cash and without a receipt.

The Courant’s “CT Watchdog” column has been stirring the issue up for a few weeks now - dozens of people have written in to the paper to share their story of double taxation. There seems to be a couple of things going on here. The first question is whether retailers are acting illegally by charging sales tax on identical exchanges where sales tax was paid at the initial point of purchase - this becomes a bigger deal the more expensive the item being exchanged becomes. The second question is where the additional sales tax has been going...has the state revenue department been quick to address complaints related to this practice?

The Governor’s office apparently thinks it has not, so we’ll just have to keep watching to see if penalties end up being levied.

Gov. Rell to order tax department to look into state tax law violations [Hartford Courant]

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This video from American Rights at Work tells the story of workers’ attempts to unionize at Yale-New Haven Hospital, and why the Employee Free Choice Act is crucial for workers everywhere. As is often the case with Wal-Mart, Yale-New Haven was the largest employer in the area and employees repeatedly tried to unionize at the hospital without success. And like Wal-Mart, hospital workers in the video describe mandatory meetings held with mangers who used fear mongering to discourage unionization. The video’s case for EFCA is persuasive not only for employees at Yale-New Haven Hospital, but workers across the country.

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Groton Panel Throws New Roadblock At Wal-Mart [The Day (Conn.)]

Less than two weeks after a Superior Court judge upheld the Planning Commission’s denial of a proposed Wal-Mart Supercenter in town, the Inland Wetlands Agency has rejected a new wetlands permit application for the same project.

The agency on Wednesday unanimously denied changes to wetlands permits submitted by Konover Development for a Supercenter on Gold Star Highway, to the east of Antonino Road.

However, wetlands permits granted in 2006 for the site are still valid, said town wetlands planner Deb Jones.

The site is in a commercial zone, but some land-use commission members have been concerned about the location of a 200,000-square-foot store in the water resource protection district.

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Ruling Goes Against Groton Wal-Mart Plan [The Day (Conn.)]

A Superior Court judge has dismissed an appeal of the Groton Planning Commission’s denial of a Wal-Mart Supercenter on Route 184 last year.

Judge Joseph J. Purtill did not deal with the merits of the land-use commission’s decision, as he came to the conclusion that Konover Development had failed to establish that it has an interest in the property, in a decision rendered Friday.

In the April 8 hearing, Town Attorney Michael Carey had questioned the four agreements that gave Konover the option to purchase the property on Gold Star Highway, to the east of Antonino Road.

Carey said at the hearing that an applicant has to have the title to or an interest in the property at the time it applies, or “they don’t have standing to file the application.”

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Wal-Mart Draws A Crowd, But Not to Shop [The Day (Conn.)]

A crowd came to the wetlands board Wednesday to weigh in on the proposed Wal-Mart Supercenter application, but Inland Wetlands Agency Chairman David Scott said that legally he had to limit discussion to the minor changes the developer is proposing.

The agency granted wetlands permits to Konover Development Corp. in 2006 for retail development on the Gold Star Highway, east of Antonino Road. It is now considering a small change in drainage onto the Gold Star Office Park property and the reassembly of an old stone wall between the two properties.

“This is not about whether or not Wal-Mart should be there,” Scott said. “There’s some psychological thing there. ... I don’t know what it is,” he said later. “But however you feel about Wal-Mart or I feel about Wal-Mart is irrelevant.”

Konover attorney Diane W. Whitney called it “a very minor part of a very minor activity.” The wetlands board deemed the application minor, but it agreed to hold a hearing after the Groton Open Space Association and other opponents filed a petition.

Marjorie Shansky, the attorney for one intervener, said she had “a certain degree of incredulity” that the wetlands board would have such a narrow scope.

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Every year, hundreds of Wal-Mart store development plans are thwarted by local community groups and activists.  Battle–Mart brings news and updates of these fights, some of communities trying to stop a new Wal-Mart from being built, others of local groups uniting to prevent an existing Wal-Mart from expanding.

Each week, Battle-Mart will highlight local fights that need immediate action. Check back each week to take action. Now it is your turn to take action to bust sprawl!

If at first you don’t succeed, try, try again…

Colonie, NY. Wal-Mart Superstore Requires Nearby Wal-Mart To Close

A year and a half after walking from Colonie, NY due to a lack of support, Wal-Mart is back before local town officials. This time around, WMW is floating the idea of building a 195,000 sq. ft supercenter. Building a new store in Colonie would mean closing an existing WMT store a few miles from the proposed supercenter site and the lay off of 275 employees, many of whom will have to seek employment at the supercenter if it is approved.

Readers are urged to email Colonie’s new supervisor, Paula Mahan at . Send Supervisor Mahan the following message:

“Colonie was right to reject the project proposed by Wal-Mart in 2006 and should take the same action now. The proposed project makes no sense. The proposed store is too big and is wrong Colonie. If you allow WMT to build bigger store, and you will force the closing of another one a few miles away. This project will not create “new” jobs. It will merely shift existing jobs from Latham Farms, and from area grocery stores, to the new Wal-Mart. I urge you to vote against this project.”

Click below to read more…

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New Plan For Giant Groton Wal-Mart [The Day (Conn.)]

A year after the Planning Commission rejected a plan for a Wal-Mart Supercenter on Route 184, the developer is trying again.

Konover Development, which is appealing the commission’s decision in court, has submitted a new application to both the town’s Inland Wetlands Agency and the Planning Commission.

The application is nearly identical to the first proposal for a 200,000 square-foot store on 37 acres, except for changes in storm drainage and other details, officials said.

The proposed construction site, to the east of Antonino Road, is in a water-resource protection district, which was a serious concern for the commission the first time around. Neighbors and the Groton Open Space Association also weighed in with concerns about increased traffic and environmental impacts.

Meanwhile, Konover’s appeal of the town’s Feb. 15, 2007, rejection is scheduled to be heard in New London Superior Court on April 8, said Diane Whitney, Konover’s attorney. The judge will then have 120 days to release a decision, Whitney said, so the resolution of that case “could still be a long ways away.”

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SW council members oppose Wal-Mart plan [Journal Inquirer (Conn.)]

SOUTH WINDSOR - Town Council members took turns Monday stating their disapproval of a plan to build a Wal-Mart superstore and a Sam’s Club.

Town Manager Matthew B. Galligan brought up Wal-Mart during the council’s meeting at Town Hall.

Representatives for the Simon Property Group have met with Galligan over several months about developing a Wal-Mart in a plaza just over the Manchester town line.

“South Windsor Towne Plaza” would be in the vicinity of Wheeler Street and Smith Street off Pleasant Valley Road, near the Jo-Ann Fabric and Craft Store.

The site would be near South Windsor’s Evergreen Walk development and Manchester’s Plaza at Buckland Hills.

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Brochure Touts Plan For Wal-Mart Supercenter [Hartford Courant (Conn.)]

Although it declined to comment when asked about plans to build a Wal-Mart Supercenter on property it owns on the South Windsor-Manchester town line, Simon Property Group of Indianapolis is seeking tenants for the development with a brochure that shows the supercenter as the anchor tenant.

The document, which is on the town of Manchester’s website, touts Simon’s Plaza at Buckland Hills as “strategically positioned at the major gateway to the greater Buckland Hills area. This power center is adding a 207,000-square-foot Wal-Mart Supercenter as well as 150,000 square feet of anchors and small shops to be completed by spring 2009.”

A Wal-Mart spokeswoman told The Courant that Wal-Mart has been looking at a number of sites, but has no confirmed plans for South Windsor.

South Windsor Town Manager Matt Galligan said Tuesday that he has spoken to Wal-Mart officials who want to build in South Windsor.

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Many communities are eager to see a new Wal-Mart come to town, but few think of the effect the retailer will have if and when it leaves. This article from Minnesota’s St. Cloud Times gives a local perspective to the retailer’s global prospects. Visit Battle-Mart for more information about fighting Wal-Mart in your local community.

Wal-Mart’s exit is boon, bane for communities [St. Cloud Times (Minn.)]

An empty Wal-Mart building sits along a stretch of road in Little Falls and shoppers have been rerouted to a newer, bigger Wal-Mart down the street.

Its owners have taken care of the old building after the Wal-Mart Supercenter was built in August. It’s been repainted a shade of light green, masking signs of what once thrived there.

At any given time, about 300 to 400 former Wal-Mart stores sit empty around the nation, in some cases for as long as five to seven years, said Ken Stone, a retired professor from Iowa State University who has studied Wal-Mart for about 20 years. Those empty buildings can be a blight to a community and area businesses if they sit untouched for too long.

“It’s a real problem, there’s no question about it,” Stone said.

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Project by Bacon Academy students examines low wages in garment industry [Norwich (Conn.) Bulletin]

Bacon Academy students got a recent lesson in fashion and economics.

Three students taking the elective Community Activism presented a documentary they filmed titled, “Is It Worth It?” which explored sweatshop conditions overseas in making clothing sold throughout the United States.

Seniors Ashley Brown, 18, and Nicole Scrivano, 18, and sophomore Marcella Schroeder, 15, were inspired to make the documentary by a Community Activism field trip. They visited the Willimantic Wal-Mart, where they looked at clothing.

“We tried to find U.S.-made or union-made clothing. It was very tough to find a match, and store workers were not helpful,” said Scrivano.

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