The Tech - Online EditionMIT's oldest and largest
newspaper & the first
newspaper published
on the web
Boston Weather: 38.0°F | Fair

Coop rebate goes down to 5 percent

By Alice Gilchrist

The annual Harvard Cooperative Society patronage rebate for the 1990-91 fiscal year dropped to 5 percent this year, down from 5.5 percent last year. The patronage rebate has been steadily falling since the late 1980s.

Even though the rebate was as high as 7.8 percent as recently as the 1987-88 fiscal year, Assistant to the Comptroller Jim Hughes said that he has not seen any "negative or adverse reaction [to the rebate] yet." Hughes did point out that it is difficult to tell how the patrons feel at this point, since rebate checks only became available Wednesday.

Pieter M. Pil G, a senior member of the Coop Board of Directors, explained that the declining percentage is linked to the recession. He said the "general retail environment is not well," which means the Coop has to run more sales in order to make a profit.

Hughes said there were complaints last year, when the rebate dropped from 7.0 percent to 5.5 percent. Hughes helped hand out the rebate checks last year and he overheard patrons remarking that the rebate was "less than last year's," although he also overheard some more optimistic people who commented that the rebate was at least "better than nothing."

Coop considering changes

In order to boost sales, Pil said that the board is considering changes to some aspects of individual Coop stores. He said that the board wants the Coop to be "more focused, like most stores." Steven Y. Schondorf '88, also a MIT representative on the Board of Directors, said that it seems as if the Coop is a "retail store like Filene's instead of the MIT university store.

Pil said that he does not know which departments will be affected, but that he personally has found that women's clothing at the Harvard Square Coop does not sell well, which may lead to renovations or reductions in that department. The only thing Pil was sure of is that textbooks will be a permanent fixture at the Coop.

The rebate percentage is calculated using the total member expenditure. Since the Coop is a cooperative, all of the profit from member sales is returned to the members. But, as Pil explained, non-member sales can increase the rebate because if they are high enough, they can subsidize electricity and other physical plant expenses.

In the 1980s, the patronage rebate ran as high as nine to 10 percent. Pil said that maybe people could lower their standards for the rebate for a while, and then they could be "pleasantly surprised."

According to Thomas Wagner, the Coop's controller, the total allotment for patronage rebates this year was $1,700,000. Last year, the allotment was $1,927,000, while it was as high as $2,492,000 in 1989.

Pil and Schondorf both said they receive many of complaints from Coop members. However, the general student population doesn't seem too enraged, at least at this point. Charles C. Abnet '92 summed up many students' opinions when he said that "the rebate doesn't really affect me one way or the other." Robert S. Weiner '86 said he is always happy to get the rebate, no matter how small, because he usually doesn't get any money back after he purchases something.

Pil said that "the board members were not excited" about the low rebate. He explained that they are all "concerned," but added that the rebate is something they cannot directly control. The Coop has taken some steps to reduce expenses, Pill said, adding that "payroll has been cut where possible." He said the rebate will "eventually inch back up to the nine percent level, but that won't happen tomorrow."