Patronage refunds for the 2017 Fiscal Year (7/1/16-6/30/17) were be distributed at our registers during November. The deadline for redemption was March, 15th, 2018.
So, what are patronage refunds anyway?
A patronage refund is the cooperative way of sharing our profits among our member-owners based on their purchases, which circulates money back into our community, helping to build a stronger local economy. As a member-owner of our co-op, patronage refunds return to you a portion of the income that your own purchases generated. In order to distribute patronage refunds to member-owners, our cooperative must follow strict criteria dictated by the statutes of incorporation in the State of New Hampshire, as well as codes laid out by the Internal Revenue Service (IRS).
The flowchart to the right outlines the process we must follow to determine how much of the profit (net income) we can distribute as patronage refunds and the method by which each member-owner’s patronage refund is determined. Key points in reviewing this flow chart are:
- We may only distribute the net income generated by member-owners (income generated from other shoppers is not included per IRS codes). For reference, member-owners have generated between 45% and 50% of income each fiscal year since we opened.
- Our Board of Directors determines the portion of member-owner net income allocated for distribution, as well as what to re-invest in our business, within the minimum and maximums dictated by IRS guidelines.
- Most patronage refunds for food co-ops are between 0.5% and 1% of the money spent by a member-owner, for a healthy, thriving co-op with a profit of 2-3% of sales.
Our co-op’s fiscal year is from July 1 to June 30th. However, the Board must wait until our tax audit is finalized before they decide on whether to distribute a refund and how much to distribute. If the Board determines our co-op is financially healthy enough to distribute patronage refunds for the fiscal year, vouchers are generally mailed to each qualifying member-owner during February in the following fiscal year.
For the fiscal year 2017, we did not issue patronage refunds to member-owners who spent less than $180, as these refunds would be less than $1, which would exceed the cost of processing. The Board may choose to increase that threshold in future years.