Coop Executives Pledge to Retain Present Refunds

The Coop has pledged not to cut patronage refund rates during the next school year--maybe.

Its Board of Directors voted Wednesday to keep paying members 10 cents on the dollar for cash purchases, and 8 cents for charge purchases through July, 1967. The refund is distributed each October.

But, although the Coop is now heading for a record $12 million annual sales, there is a possibility that it will be forced to lower the rates next spring, despite the pledge.

Under federal tax laws, the Coop's total refund to members can not exceed its profit from their business. And next year, as the Coop starts running and paying for its $1.5 million annex, the profit may dip too low for an 8 and 10 per cent refund, General Manager John G. Morrill said yesterday. But he doubted that the refund would have to be cut by more than one per cent.

No Change Since 1950

The cut, if it is made, would be the first change in the Coop's rates since 1950. Before 1962, Morrill explained, the Coop made up for a tight year by paying members some of the profit it makes from business with non-members, wholesalers and universities.

But the new federal tax laws forbid this practice so that, for example, $250,000 that the Coop will receive from M.I.T. for its old store there cannot be used to pay next year's refunds.

It is fairly certain, however, that the refund rates will not be going up. The Coop now feels that profits above the 8 and 10 per cent refund should be used first for new facilities, such as the projected Medical School Coop, and for improvements.

"This rate's been accepted by everyone," Morrill said. "I don't think students would scream if it went down to 7 and 9 or cheer if it went up to 10 and 12.