Chump change or chump customers? B.C. woman steamed over Walmart's wrongful GST charge
Walmart shopper wonders how many others were overcharged due to error in store's check out system
It's not the 18 cents in GST she was wrongly charged at the New Westminster Walmart that's got Sally Dossa steamed.
It's that after noticing the mistake and flagging it to store managers, she was told she couldn't get a refund because there was no way of overriding Walmart's centralized computer check-out system.
"They said it comes from head office," said Dossa, sounding slightly exasperated. "They had no answer for me."
The error occurred last week when Dossa was charged GST on one of five food items she purchased at the retail chain. Under law, basic groceries are exempt from GST.
Walmart doesn't benefit financially from the tax it collects. Rather, it passes that money to the Canada Revenue Agency.
The incident got her thinking though. Because what might seem like chump change in a singular instance, is anything but when you consider Walmart's big footprint on the Canadian retail landscape.
"If they have 2,000 customers going through that store every day and if each one is paying an extra 20 cents... it ends up being a lot of money," said Dossa. "And if it's happening at this store, it's happening at all Walmart stores."
There are 411 Walmart stores in Canada meaning a small mistake can multiply into big money.
And that's why Dossa contacted CBC. Not because of 18 pennies, but because of the principle of it all.
"I feel it's my moral duty as a citizen to bring it to someone's attention," said Dossa. "If each one of us walked away and didn't care about these things then we're all going to be paying for stuff we shouldn't be paying for."
Walmart Canada told CBC that it has fixed the error in its system, but it didn't answer questions about how many other customers wrongly paid GST, or how long the error was in the system.
"Tracking provincial and federal tax on millions of possible products in-store and online is complex," said Walmart's Felicia Fefer in an emailed response.
GST, confusing receipts and the law
The general rule in Canada is that basic grocery items are "zero-rated" or GST exempt under the Excise Tax Act.
Dossa bought five items at Walmart — milk, yams, tomatoes, apples and a bag of flour — all zero-rated items.
Even though she knew she shouldn't be paying GST, she also couldn't tell from looking at the receipt which item it had been incorrectly charged to.
And that point of confusion — a receipt that doesn't clearly indicate which item is being taxed — might be the biggest problem, according to lawyer Jeff Orenstein.
Amazon class action
Earlier this year, Orenstein and his firm Consumer Law Group, successfully argued a class action against Amazon on behalf of almost 7,000 clients in the Quebec Court of Appeal.
Amazon is now appealing the decision to the Supreme Court of Canada.
In the case, Amazon was found to be charging GST on a slew of zero-rated food and medical items, collecting million of dollars in error. But that fact wasn't enough to carry the case because Canada Revenue Agency provides a remedy for customers who have wrongly paid tax.
Instead, Orenstein argued that under the Consumer Protection Act, Amazon's billing system was a misrepresentation to consumers because the company didn't indicate which items were being taxed and which weren't.
"[Amazon's] bill didn't tell you anything," he said. "It didn't tell you which items were taxable which were not taxable — it was all global GST and global PST and you need a calculator and trial and error to figure it out. And we won on that."
Orenstein said, in his opinion, Dossa's Walmart receipt is similarly problematic.
"I think [the Walmart receipt] would fall under the same type of idea as Amazon, where the bill itself is so confusing that it is the misrepresentation," said Orenstein.
Orenstein says the system is tilted against the individual.
According to the Canada Revenue Agency, a customer seeking to get their wrongly charged tax back should first ask the store for a refund or credit like Dossa did — albeit unsuccessfully. But even then, there is no legal obligation for the store to refund the money.
System is 'crazy,' says lawyer
The only other option is to fill out a multi-page document called the GST189 General Application of Rebate of Goods and Services Tax and submit it to Revenue Canada for consideration along with your receipt.
Orenstein says the system is "crazy."
"Ask 100 people on the street and you'll be lucky if one person knows that you can fill out a form and get your money back from Revenue Canada," he said. "But that's the way the system is designed."
A spokeswoman for the CRA said there is no penalty for a company that collects GST in error.
Walmart said, as per the law, the tax it wrongly collects is remitted to the proper body. "In this case, it was passed on to the Canada Revenue Agency and did not go to Walmart," said Fefer.
Fefer says anyone who believes they were incorrectly charged at Walmart should bring their receipt to the store for a refund.