Patronage Rebate FAQ

What are patronage rebates?

Patronage rebates allocate back to our owners part of the Co-op's surplus earnings from the previous year and are calculated as a percentage of each owner's purchases (your patronage).  Rebates can benefit owners in particularly profitable years, cushion Co-op finances in lean years, and build owner equity investment when extra funds are needed to improve the capital position and liquidity of the Co-op. Rebates are also an important means provided by the Internal Revenue Code for member-owned cooperatives to reduce their taxable income.

Are net earnings (profits) returned to owners in part or in full?

Each year, our Board determines how much should be returned to owners as cash and how much, if any, should be retained. By law at least 20% of the total allocation is paid out to individual owners; up to 80% can be retained  for capital needs. When some percentage of the rebate pool is retained, you as Co-op owners in effect jointly invest more money to grow your cooperative business and provide more of the services you want. Thus rebates benefit both you as individual owners and the Co-op as a whole.

How is the size of my individual rebate determined?

Your rebate is proportional to your purchases (the more you spend, the greater your rebate). This method of surplus income distribution distinguishes cooperatives from other types of corporations that distribute profit based on investment (where the more you invest, the greater your return), and is the foundation for making our Co-op a community asset whose real bottom line is service to you, the owners.

Is the rebate I receive taxable?

The patronage rebate is considered by the IRS to be a rebate on purchases of personal items, so it is not taxable income for individuals. Think of it as a deferred price reduction. If your purchases were for business purposes rather than personal use, consult your tax adviser.

Can I donate my patronage rebate check back to Good Foods?
YES!  Just endorse the check and drop it off at the Customer Service desk.  The money will be donated to Good Foods Give Where You Live Program which supports local nonprofits.

How do I redeem my patronage rebate check?
You may cash it at your credit union or bank, or if you choose, cash it at Good Foods.

Is there a time limit for redeeming my patronage rebate?
YES. The patronage rebate check is void after 90 day. Please redeem your check by July 31, 2012.

If the check is not cashed within 90 days, we are required to turn the money over to the Unclaimed Property Division of the Kentucky State Treasurer.

Other questions:  Contact Ann Marx, Owner Services Manager, 278-1813 ext. 244 or annm@goodfoods.coop