Walmart Keeps Sales Tax on Returned Items, Class Action Says

UPDATE: December 2020, the Walmart, Sam’s Club sales tax refund class action settlement is now open. Click here to file a claim.

A Missouri man says Walmart has been unlawfully failing to refund the sales tax on certain returned merchandise.

According to plaintiff Scott Pearlstone, defendant Wal-Mart Stores Inc. does not refund the sales tax on every kind of item brought back to the store for a refund.

By selectively retaining this tax revenue, Pearlstone claims, Walmart breaches its contracts with its customers and violates Missouri consumer protection law.

Walmart’s alleged practice also runs contrary to its written return policy, according to Pearlstone. Generally, the policy offers customers a full refund on items returned within 90 days of the date of purchase. Customers with the original store receipt can receive the refund through the original payment method, and those without a receipt can receive a store credit, Pearlstone says.

The policy lists many exceptions to that general rule for certain specific items like plants, mobile electronics, and firearms. In all cases, Pearlstone says, the return policy affords the customer a way to get a full refund, which he argues should include all sales taxes paid.

This policy is part of the contract Walmart forms with the customer with every purchase, according to this Walmart class action lawsuit. Pearlstone argues that by refusing to refund the sales tax on certain items returned for a refund, Walmart denies the customer the full refund they’re contractually entitled to.

Pearlstone says he made purchases from a Walmart in Manchester, Mo. on two occasions in late September and early October 2017. He says he returned to the store on Oct. 3 to return the items for a refund, and he claims he was not refunded the sales tax on certain items.

He says when he asked a store representative why the sales tax was not refunded, he was told it was simply a matter of store policy.

In his Walmart class action lawsuit, Pearlstone is raising claims for breach of contract, unjust enrichment, and violation of the Missouri Merchandising Practices Act.

Pearlstone proposes to represent a nationwide Class covering all persons who purchased items from Walmart, paid sales tax on that purchase, returned an item from that purchase, and were not refunded the full sales tax amount paid on the returned items, all within the applicable statutory limitations period.

He also proposes a subclass to cover Class Members who made their purchase from a Walmart in Missouri. He expects there are tens and possibly hundreds of thousands of Walmart customers who would qualify as Class Members.

He seeks awards of actual, compensatory and punitive damages and injunctive relief barring Walmart from continuing the practices complained of here. He also seeks reimbursement of court costs and attorneys’ fees, and any other relief the court sees fit to grant.

Pearlstone’s attorneys are Lanny Darr of Darr Firm and Myles McGuire, Paul T. Geske and Jad Sheikali of McGuire Law PC.

The Walmart Unrefunded Sales Tax Class Action Lawsuit is Pearlstone v. Wal-Mart Stores Inc., Case No. 4:17-cv-02856, in the U.S. District Court for the Eastern District of Missouri.