What is a Patronage Refund?

Patronage refund is the official name for how co-ops send profits back to their members. As owners of the co-op, members also own the profit. Here's how it works:

The Wedge provides its members delicious food and other fun things. Every member purchase is recorded in the membership records. When the Wedge is profitable, the board and management review plans and financial obligations. The co-op sets aside any profit needed to pay for those and records it in each member's account as non-voting shares in the Wedge. The money that is not needed to reinvest in the business is returned by check to the members. Your patronage refund is based on the amount of your purchases over the fiscal year (July 1-June 30). Checks are mailed in November or December for the year that ended the previous June 30.

When you get your check, the stub will mention the part of the profit the Wedge is reinvesting in the business. This is called "qualified equity certificates," a type of stock share. The law requires us to let you know about the retained portion of the year's profits in this manner. Co-op shares differ from stock in other kinds of businesses. They do not gain or lose value, they cannot be traded, and they do not increase your voting power in co-op elections. It is really an accounting method that shows who the co-op belongs to. These reinvested (retained) shares are our legacy to future generations.

Patronage refunds are NOT taxable income when they are returned to member-owners. It's a refund, not a dividend. We'll remind you of this on the check stub, as well!