Costco (COST) Is Doing Something Bad With Toilet Paper

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New Jersey couple Jacqueline Taufield and Robert Arnold, have filed a class-action lawsuit against Costco Wholesale and several of its stores on Friday.

The couple claim that the warehouse chain has not only been illegally overcharging them but potentially hundreds of thousands of other customers by charging sales tax on toilet tissue purchases in violation of state law.

In New Jersey, toilet paper sold for household use is exempt from the state’s 7 percent sales tax.

The couple say they were charged the tax when they purchased Charmin toilet tissue on July 26, 2015, from a Costco in Wayne, New Jersey. They were also charged tax a few days later at a Costco in Hackensack.

Although the couple complained to management, “they refused to issue a rebate to them.”

The couple’s lawyer stated, “Rather than refund [Robert’s] money, they told him, ‘Well, if you believe that, you have to mail your receipt to the corporate headquarters along with a letter and tell the corporate headquarters how you were improperly charged tax.'”

“The obvious solution is to say, ‘You’re absolutely right … we made a mistake, here’s your money back,’ ” the lawyer said.

A Costco spokeswoman commented in regards to the suit, “Unfortunately, we are not able to provide a response at this time.”

The suit says the class of potentially affected customers is more than 100,000 people. Arnold said the potential damages for the class would be in the “millions of dollars.”

I think it’s time we all go check our Costco receipts.

Disclaimer: We have no position in Costco Wholesale Corporation (NASDAQ: COST) and have not been compensated for this article.