ST. LOUIS — Schnuck Markets is facing a class action lawsuit over claims that it has been unlawfully charging Missouri customers sales tax on the full retail price of purchases — even when those purchases were discounted using Schnucks Rewards Points.
Sharon Garcia, a Missouri resident, brought the case on behalf of herself and all similarly situated consumers, alleging deceptive and misleading business practices by the grocery chain, according to a complaint filed May 2 in St. Louis Circuit Court.
Missouri state law prohibits retailers from collecting sales tax on pricing discounts, the complaint states.
The law states that taxes must only apply to the final sale price paid by the consumer, excluding any off-invoice or promotional discounts.
Despite this clear directive, the lawsuit claims Schnucks has been collecting sales tax based on the original, undiscounted prices of products even after customers redeemed Rewards Points to lower the cost.
Garcia argues that Schnucks’ Rewards Points, which customers accrue based on prior purchases and can redeem for discounts on future purchases, qualify as "pricing discounts" under Missouri tax law and thus should be excluded from the taxable amount.
Schnucks allegedly fails to do this, instead calculating and charging sales tax on the full retail amount prior to the application of the Rewards discount, the complaint states.
On March 30, Garcia made a purchase at a Schnucks location in Ladue, using $3.00 worth of Rewards Points. She was charged sales tax at rates of 9.488 percent and 6.100 percent on the full $58.31 retail total before her discount was applied, according to the suit.
Garcia claims she relied on the store’s representation that she was being charged the correct amount of sales tax mandated by state and local authorities.
She claims Schnucks misrepresented the taxability of these transactions and failed to disclose that it was unlawfully collecting sales tax on amounts that Missouri law explicitly excludes from taxation.
As a result, Garcia alleges that she and other class members paid more than they should have for groceries and other household items, suffering economic harm in the process.
The suit further alleges that Schnucks’ practice of overcharging under the guise of “sales tax” is widespread and affected every Missouri consumer who redeemed Rewards Points during the five-year class period.
Garcia claims that consumers were misled into believing they were paying the correct amount of tax and that Schnucks knowingly or negligently made false statements to that effect.
The plaintiff argues that the Rewards Points were already taxed when initially earned through full-price purchases, and applying tax again when the points are redeemed amounts to unlawful double taxation.
The suit claims this practice contradicts not only the statutory text but also fundamental principles of consumer fairness and transparency.
Garcia is seeking compensatory damages, as well as injunctive relief to prevent Schnucks from continuing this practice. She also requests that the court certify the class, appoint her attorneys as class counsel. She is represented by Daniel J. Orlowsky of Orlowsky Law in St. Louis; and Adam M. Goffstein of Goffstein Law in St. Louis.
St. Louis Circuit Court case number: 25SL-CC04761