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K-Mart Illegally Taxes Toilet Paper

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A Pennsylvania K-Mart levied an illegal $0.28 tax on Mary Bach's $3.99 12-pack of Angel Soft toilet paper. Pennsylvania's sales tax guide clearly states that toilet paper is a non-taxable item. Mary first spoke with a cashier after noticing the illegal charge. When K-Mart again charged her the tax on a second visit, she decided to sue.

A self-styled consumer advocate who heads AARP's Pennsylvania consumer issues task force, she has been crusading against price scanner errors for nearly 25 years. Her efforts helped spur laws requiring scanner inspections by the state's Bureau of Weights and Measures.

"Somebody has to draw attention the problems in the marketplace with these kinds of issues," she said.

Most notably, she has taken on Wal-Mart, CVS and the now-defunct Hechinger over price scanning errors.

In the case of Wal-Mart, the giant retailer paid her $100 plus court costs in 2002 for charging sales tax on a pair of ballerina-style bedroom slippers. In court, Wal-Mart's attorney argued that sales tax was appropriate because the slippers were classified as dancing shoes, she says. "It makes for a funny story."

Besides her latest suit, she has hauled Kmart to court three other times for charging her a higher price on an item than promised in an advertisement or display. In all three cases, both sides showed up at the magistrate's office but reached a settlement before arguments were heard, Mrs. Bach says.

Pennsylvania's Unfair Trade Practices and Consumer Protection Law allows plaintiffs to sue either for the amount of damages, or $100 - whichever is greater. If K-Mart doesn't want to settle, a District Judge will decide Mary's case on Halloween.

Shopper sues Kmart in toilet tissue tax dispute [Pittsburgh Post-Gazette]
(Photo: d00d)

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homerjay
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This woman needs to be a Consumerist Associate Editor.

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"If K-Mart doesn't want to settle, a District Judge will decide Mary's case on Halloween"

and at the peak of toilet paper season, no less...

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She spoke to a cashier, but never to a manager or to corporate? I mean, don't get me wrong... an incorrect charge is an incorrect charge, but it sounds like she talked to Register Biscuit #304, and gave up at that, instead of bringing the problem to the attention of someone who can actually fix it.

We have problems with our scanners at work all the time, but when you're changing 5000+ prices every week, it's obvious that a few will slip through. When the problem is brought to our attention, we fix it... it sounds like this woman didn't even try, just wants to sue like the rest of America.

(I don't work for K-Mart, but for a grocery store chain)

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She wasn't obligated to do anything. The burden rested, and remains there for KMart to get it right the first time. Thankfully, PA has a venue for ALL consumers to benefit when an old Lady has the "stones" bring them to task in court.

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@Shadowfire:

I agree with you that she should have escalated the initial complaint to at least the store manager on the first occasion, that should certainly save everyone involved a lot of trouble.

However, I disagree with your explanation that prices have to be rekeyed all the time. This is not a case of the price being in error, but of a non-taxable item being mis-categorized, that should only been once for any given UPC/SKU and it should be verified by at least one other person at that time. A mis-categorization which should be done at least on the statewide level by the chain can result in a huge miscalculation of taxes withheld. However, if a store withholds taxes on non-taxable items that results in a huge windfall for the corporation. I would hope that the results of this suit include a statewide internal audit by K-Mart to determine the accuracy of the taxable determination for every product they sell and if there is a net over-withholding, that restitution be made in the form of a donation to organization that the poor in the state.

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This is a fine example of people who nickel and dime companies out of business.

A local Chinese restaurant charged me tax on food the other day. You don't see me crying over $0.25

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@Shadowfire: So who else to talk to besides the one operating the machine that is illegally charging you? Cashiers can and do override pricing mistakes, especially for amounts that small.

Besides, she did not sue after the first time. They were given a chance to fix their error and did not.

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@RandoTheKing: And them illegally nickel and diming you is OK? If your profits depend on illegal activity, you shouldn't BE in business.

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Actually, if you extend the taxation to all people who shop at that location and purchase that product, a substantial amount of money becomes involved. IANAL, but I imagine some kind of tax fraud might be involved, aka taxing illegally and keeping the money rather than passing it along.

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"Besides her latest suit, she has hauled Kmart to court three other times for charging her a higher price on an item than promised in an advertisement or display."


You would think they would exercise their right to refuse sale to her by now. Sounds like she just is looking for a fight. I would ban her from all of the stores and file trespassing charges as soon as she tried to walk into one. That is one customer you do not want.

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@cosby: your right, they could ban her from k-mart, and in the same breath, she has the right to sue them for discrimination. if kmart bans someone for pointing out they are repeatedly breaking the law, its discrimination.

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@Buran: I am a cashier and I have no idea how to make an item not taxed. I would bet 80% of cashiers don't know how either. Cashiers are not the people that put products into the system. I can change the price of something but only for one sale at a time. Not to mention I have no clue what things should and should not be taxed. If someone told me toilet paper wasn't supposed to be taxed I'd say "isn't it? who knew." I would try to make a note to ask my manager about it, but I always have a line at the register so it could be over an hour before I get the chance to leave.

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I have nothing constructive to say about the case, but I laughed out loud at that photo. I used to have a cat that did that, and even though it drove me nuts, it made me crack up too. I miss him.

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@RandoTheKing: Wow.... you can't be serious.

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@cosby: also it would be near impossible for them to remember everybody they don't want in the store. what happens when someone silmilar looking walks in to buy gum? do you card them to see their name? do you just refuse them and ope yourself for a lawsuit.

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im in ur bafroomz, shreddin ur toilet paperz.


(apologies to all if LOLCATS is really played out around here)

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@RandoTheKing: Tax on the food, or on the soda you probably bought with the food?

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wish i could see my earlier posts. oh well.

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@cosby: said:You would think they would exercise their right to refuse sale to her by now. Sounds like she just is looking for a fight. I would ban her from all of the stores and file trespassing charges as soon as she tried to walk into one. That is one customer you do not want.


you are right they can refuse service to anybody for any reason. but in the same respect she would have the right to sue for discrimination. if you ban someone from your store because they pointed out how you repeatedly broke the law, they could sue you. (and would win). thats why business don't use that right unless they have a legit reason, such as shoplifting, check fraud etc.


also, what should they do? put posters of all unwanted customers statewide, spend money to train you to reconize faces, and then look at someones id if they look like someone who's not supposed to be there? yeah right.

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Stupid stupid sales tax laws...
And the wonderful state of Ohio wants you to pay sales tax (they call it a 'use' tax) on items you bought in another state that were not taxable in that state. i.e., you go to Pa. to buy clothes which are not taxed and bring them to your (former) home state of Ohio, they think you should pay the equivalent sales tax on the clothes.

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@Shadowfire:

I agree, I used to work in the scanning department of a major grocery store too. Cashiers simply didn't bother to write down every price inaccuracy or not found item, because they didn't care/didn't have time. Escalating to a manger could have gotten the problem fixed on the spot, or at least written down for the right person to fix.

There's also the possibility that it was just one type of toilet paper that was mistaxed. In the system I used to work with, whether something was taxable was just a single checkbox amongst a bunch of options, so it was possible to mistakenly select it. We did, however, get reports that alerted us if our taxing didn't match to the regional taxing.

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I should have added, restaurants charge tax on food you order because it's considered a service, not a food product.

Doesn't mean that you're not an idiot.

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@RandoTheKing: Not sure about your state, but food from restaurants here is taxable.

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@FLConsumer: here also in indiana.

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@doctor_cos: Not just Ohio. I don't have a definitive list, but most states that have sales tax also have use tax laws. I recall reading some years back (NY Times maybe) that in NY, the tax authority got hold of high-dollar purchase records and sent the buyers use tax bills.

Apparently in California, they post your name online if you are seriously ($100,000+) delinquent in your use tax payment. (And isn't Board of Equialzation a creepy name for a government agency?)

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Most of the cashiers that I work with don't know how to make things tax exempt. The only ones who do are those who work in our business sales department, and that is because we sell to re-sellers and gov. agencies. Both of which are exempt.

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@RandoTheKing: I'm willing to bet Kmart "nickel-and-dimed" consumers out of a lot more than a $100 in illegally collected taxes.

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@RandoTheKing: Judging from your previous comments, you appear to have a very sheltered, limited and self-centered world view. This means anything I say is likely not to penetrate, or will attract insults. However, I persist:

Charging a tax when one is not levied is dishonest, unethical and illegal.

Considering the volume of business K-Mart does on a daily basis, using this practice an individual store can reap hundreds of dollars per month in profit that the store is not entitled to collect. It's probably not unreasonable to believe that toilet paper is not the only improperly taxed item in their inventory, so multiply that and there's a few thousand dollars extra income per month. Now take that issue and repeat it across all K-Mart stores in the state.

It may indeed be an error on K-Mart's part. Perhaps they made a mistake. But sometimes, mistakes have big consequences. Perhaps they'll be less likely to nickel and dime consumers in the future.

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I think that Kmart should pay the lady $100+court costs if thats what the law in PA says. My problem with this case is that the lady should have asked to see a manager and CALMLY explained that whenever she buys this toilet paper, she gets taxed for it when she isn't supposed to. I am quite sure that a manager at Kmart or any other retailer would apologize to the customer, go to customer service and get her 28 cents back. Then the manager would make sure to get the problem corrected. What store manager WOULDN'T get this issue corrected because if they don't, then someone else will want to speak to them about the same issue later on. Managers really don't like getting called up to take customer complaints. I wish the $100 law wasn't on the books so a judge could say, ok lady Kmart has to pay you 28 cents and your court fees.

At the Kmart store I used to work at, we had a customer that would come in and walk around for a couple hours almost every weekday looking for mismarked items or expired sale tags in the grocery department. Almost no matter what it was, she would get one of the item and bring it to a cashier to buy it. Of course, the price that rang up was never the price she said it was for so the cashier would have to call to the dept to get the correct price verified. I remember one time that the person in the department wouldn't give her the cheaper price, she went back to the department and grabbed the expired sign (complete with metal holder) and came up and threw it at the cashier to show the right price. After she finally got checked out, she'd go find her favorite manager to complain to. Much of the time, she would just go up to customer service and return most of the stuff she bought too. I guess the bright side of my story is that she never too us to court (well to my knowledge anyway).

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@MystiMel: But you agree that you'd tell the management. I think that's why she didn't sue right away. They still didn't fix it though.

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@cosby: And that's when she goes to the government and they add "retaliation against a whistleblower" or similar appropriate charges -- you cannot expect to act against someone who is trying to report illegal behavior and get off without being punished for that.

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@eelmonger:

Cashiers simply didn't bother to write down every price inaccuracy or not found item, because they didn't care/didn't have time. Escalating to a manger could have gotten the problem fixed on the spot, or at least written down for the right person to fix.

A Cashier's apathy or lack of time is not the consumer's problem. That is an issue that management needs to take up with the cashier or their own scheduling process. The consumer's responsibility to report problems ends with the first representative of the company they talk to, unless they want to escalate.

I bet after enough stores get sued for this, they'll manage to find some time for the cashiers to report pricing and taxing problems.

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Could someone in PA please step into the nearest KMart and at least see if they've made the change?

The article states that the Bach did escalate to a manager on the second visit. It doesn't elaborate, but I'm guessing they didn't give her a refund and probably didn't fix the computer error that had the product coded improperly.

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@Buran: I'd try to remember to. However often things like that can be forgotten. A lot of the time things don't ring up at all in our store. I end up having to manually look up the item or modify the price of an existing item that is similar just so I can get through the line. There really is no time to write down everything and no way to remember everything. When I do remember though, I'll let the right people know about it. It's a pain for me to have to do the corrections just as much as it is to the customer.

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@Buran: That depends heavily on the business... usually, cashiers altering prices is a quick way for them to be "promoted to customer."

What I'm saying, folks, is that sometimes errors like this occur, and it's not some evil corporation trying to steal your money and pocket it in the name of taxes or something. Sometimes it's a mistake, and people decide to be assholes about it. The woman in this case did not do anything but tell one cashier. Should the cashier have escalated? Probably. However, I can't count the number of times I've heard from customers "that shouldn't be taxed." It's usually the customer trying to pull one over on the cashier, and I'm sure that's what the cashier thought in this case. This woman is suing instead of moving the issue up the chain. I hope K-Mart fixes the error in their computer, and I at the same time hope this woman loses her suit. It's damn near the definition of frivolous.

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Yay, geezer consumer lady!
Look: K-Mart is either pocketing the ill-gotten, illegally collected taxes, or they are passing them on to the state. Either way, all they had to do was fix a line in a computer program somewhere (most likely check or un-check a box in a program somewhere), give the lady her change, and not do it again. The fact that they seem willing to go to court over this and suffer the potential bad publicity (us writing about it here) tells me that this is profitable to them or that they are colossally stupid. or, as my DH says "Why can't it be both?"
At the end of the day, K-Mart stole money from this lady and from everyone else who bought TP at their PA store(s). Does the amount matter? They don't even have the decency to correct this. How lame is that?

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I work at a grocery store doing the price changes. There are some things that we try to get fixed (we have to have our store manager call them in, and he does), and it takes WEEKS sometimes to get fixed, if it does at all. So, don't be so quick to blame the stores...a lot of times we are doing our jobs!

I seriously doubt this is a case of the corporation nickel and diming anyone, as you're all so quick to assume. There are SOOO many price changes just at Shaw's where I work (each week there are at least 2500 just on Thursday when the sales change, in the week there are another probably 2000 price changes), I can't even imagine how many there are at a big store like KMart. It's hard for one person to keep track of so many things. I know it is for me at least - there are plenty of times when I have forgotten to pull down an out of date sale tag, or couldn't get a price change hung in time. The customer got it for the price on the shelf.

I really think the fact that she is suing is wrong - she seems like the kind of person who is just willing to sue anyone for a quick buck. If anyone is nickel and diming here, it seems to be her!

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The full length article indicates that she spoke to a store manager the second time she was charged sales tax, but received no satisfaction. My take on this is that she's a troublemaker AND she's right. It's likely that KMart could settle this before it becomes a multimillion dollar class action suit... but if it doesn't, oh well....

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the nation needs people like this. weather you realize it or not, people like her prevent the rest of the busy world from blindly being bent over. she's like a mystery shopper for the law! you go girl!

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This woman is the kind of person that helps to keep the stores honest. While K-Mart most likely just passed the improperly collected tax onto the State, this is still a violation of proper, and in most states, legal business practice.

No matter who she spoke to at the store, and it is noted that she did speak to a manager, it is their legal obligation to deal with an unlawful situation, or to pass it up the line. That is part of the cost and responsibility of doing business and having a job.

As far as errors resulting from frequent price changes go, if a business can't keep their prices straight, then they need a more realistic business model. A business generally has a right to charge as they wish, but displaying a shelf price, and then charging a higher price, is fraud. A business that uses a confusing model that chronically causes such errors is criminal. They should pay at least the same penalty that shoplifters do for the knowing and unlawful conversion (theft) of funds.

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@Raziya: But what you are describing is NOT what is happening here. Nobody forgot to re-tag an item or pull down a sale sign. This is a problem in the coding of their POS system that is telling the system that toilet paper should be taxed. This is not a case of "this toilet paper was marked $3.00 but it's ringing up as $4.00" which would be a totally different scenario.

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@morganlh85: It depends on the system. In our system, when new things are put in, they are put into tax and non-tax categories. Someone accidentally types Y for Yes instead of N for no in the tax category, and it rings up as taxable until someone realizes its wrong. It's not like we have a category of "toilet paper" and all things that are in that category are or are not taxed. If the k-mart system is similar, it may even be that only a single brand and count of toilet paper was taxed, and it was due to error on the part of the person entering in the products.

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@inconsumer: Refusing service to someone on a basis other than their membership in a protected class is discrimination? Really? Cite?

@LAgirl: around here?

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I live in Pa. and it is not the duty of the customer (me) to make sure K-mart changes their list of taxable items.
If I buy a product that is taxed when it is not a taxable item and I report this to ANYONE in that company, I HAVE made the company aware of the problem. Whether or not they deem it worthwhile to escalate to their boss is their concern, not mine.


I am a customer, not an employee. I am not responsible to hand hold that company and make sure that they make the change.
If they continue to steal from me, it is my recourse to sue them.
THAT is the consequence of their action. The company's problem is the employee who decided a $.28 issue that could end up costing them $100 isn't worth reporting.
Not my concern.


There are consequences if I steal money from them and get caught.
Why should there not be consequences if they steal money from me?

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@Raziya: She's not suing for a quick buck. She's suing because lawsuits cost these companies money. They think they can get away with understaffing and undertraining their staff to save a couple of bucks, and she's just making it more expensive for them to be lazy.

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Food is not taxable in Ohio, and no I didn't order a soda.

My point is most of you expect everything to be perfect and you expect people not to make mistakes. Seeing as how Kmart is in many, many states, this item is listed as taxable by default unless modified. Items can easily slip through cracks and if no one reports it to someone that matters, ie a manger, then nothing is going to happen.

She'll lose her lawsuit without a doubt.

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Walgreen's did this when the soda tax was increased in Chicago - they charged the regular tax PLUS the soda tax. It ended up being about a 25% tax! I reported them to the City of Chicago and they got it straightened out. It was stupid and ridiculous.

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@RandoTheKing: Not sure about Ohio but I have lived in quite a few states and generally FOOD is not taxable. Prepared food is however. Getting food at a restaurant or a broaster chicken from the grocery store incurs tax because it has been prepared.

From Ohio's Tax website
[tax.ohio.gov]
What sales are exempt/excepted from sales tax?

Food for human consumption off the premises where sold (food does not include alcoholic beverages, dietary supplements, soft drinks, or tobacco).