Coop May Lower Its Patronage Refund

The Harvard Cooperative Society may be forced to lower its patronage refund by one per cent for the fiscal year 1965-1966, according to John G. Morrill, the Coop's general manager.

Morrill said the cost of the new text book annex might force the reduction, but he stressed that this year the Coop will maintain its present patronage refund of ten per cent on cash purchases and eight per cent of charge purchases.

"We will break our backs to keep expenses down and prevent any reductions next year," he added.

The Coop's annual report for fiscal year 1963-1964, which is being distributed to members with their patronage refund checks, indicates that despite record sales of $9.7 million, the organization's net income was down from last year.

Morrill said the decrease in profit did not reflect a poor year, but resulted from an "unusually successful" year in 1963. "We had record sales both years, but in '63 we held expenses and this year we couldn't," he said.

Morrill said, however, that salary in creases, resulting from new minimum wage laws, were the biggest new expenses. He indicated that the purchase of land on Palmer St. for the new annex and improvements in the employees' pension plan had also contributed to the decrease in profits.

According to new tax regulations, cooperatives can pay out patronage refunds only on the net earnings from business done with members. Profits from business done with non-members cannot be paid out in refunds, which are non-taxable. Morrill said these new regulations increased the possibility of future reductions in the patronage refunds.

The Coop is paying out $597,000 in refunds this fall, an increase of $27,000 over last year. Membership has reached an all time high of 50,343, according to the report.