Use It; Don’t Lose It
Your 2008-09 member rebate vouchers should be used at the co-op no later than FEBRUARY 28, 2010. Spending your voucher HELPS the store, since unredeemed vouchers are lost income and not a cost savings for the cooperative—it’s your deferred discount on the purchases you made at your cooperative between July 1, 2008 and June 30, 2009. Enjoy!
Background On Patronage Rebates
What is a Patronage Rebate?
In years when the co-op makes a profit, the board of directors has the option to distribute a portion of the profit to our member-owners. By law, rebates can only come from the money that co-op members spent at our store, and must be allocated to each member in proportion to their purchases at the co-op.
In 2008-09, member-owner purchases at the co-op represented 66% of everything we sold. That meant that 66% of the store’s profits were available for the rebate, totaling nearly $100,454.
For this rebate period, the board voted to allocate 25% of the rebate amount in cash, and retain 75% as equity, also called Class B shares. Retained equity is an investment in the future of the co-op. It does not increase the number of votes a member has, and has no cash value.
What do I do with my voucher?
Your patronage voucher can be used towards a purchase at either Linden Hills Co-op or Linden Hills Natural Home. The voucher DOES have an expiration date—FEBRUARY 28, 2010—and should be treated like cash.
Is the rebate taxable income?
No. Rebates are considered a deferred discount on the purchases you have already made, so you don’t need to report the cash amount of your patronage refund on your income taxes. In addition, the co-op reduces its own tax liability by distributing a portion of the profits as a patronage rebate. You win, and so does the co-op you own.
Why didn’t I get a rebate voucher?
The co-op’s bylaws set a lower limit on the rebates—if your rebate voucher’s cash value was less than $3, the cost to the co-op of printing, mailing and processing the voucher is greater than the value of the voucher. So, this year, member-owners who spent less than $745 at the store between July 1, 2008 and June 30, 2009 did not receive a voucher.
Or if you joined the co-op AFTER June 30, 2009, you will not be eligible for a patronage rebate until the close of the current fiscal year next June.