A Schnucks shopper’s complaint over a $3 rewards discount at a Ladue store has turned into a $6.3 million class action settlement that could put $7 back in the pockets of Missouri customers who used loyalty points at the grocery chain over the past six years. The deal, preliminarily approved by a St. Louis County Circuit Court judge last month, resolves claims that Schnucks illegally charged sales tax on the full retail price of items before applying reward point discounts.
The case traces back to Sharon Garcia, a University City resident who filed suit against Schnucks in St. Louis County Circuit Court in May 2025. As reported by the St. Louis Post-Dispatch, Garcia bought items at a Schnucks store using earned rewards points on March 30, 2025, and paid sales tax on her purchase total before a $3 discount from those points was applied. According to Legal Newsline, Garcia’s complaint specified that during that transaction at the Ladue store, she was charged sales tax rates of 9.488% and 6.100% on a full $58.31 total before the discount reduced her bill.
The Legal Theory Behind the Double-Tax Claim
Garcia’s lawsuit argued that Schnucks reward points should be excluded from the sales tax base when used to lower a customer’s total, since those points are earned through prior full-priced, fully taxed store purchases. Per the same Legal Newsline report, that reasoning meant collecting sales tax again when the points were redeemed amounted to unlawful double taxation under Missouri law. The 2025 lawsuit claimed Schnucks charged sales tax on the full purchase price instead of the discounted total after rewards points were applied, rather than subtracting the reward value first.
That argument leans on a specific piece of Missouri regulation. Under Missouri Code of State Regulations 12 CSR 10-103.555, sales tax applies to gross retail receipts, but retailer-funded pricing discounts that reduce the purchase price at or before the sale are excluded from taxable gross receipts, according to Legal Newsline’s coverage of the rule. Missouri is among a small group of states — along with Connecticut, Massachusetts, Pennsylvania, and Texas — that explicitly require retailers to calculate sales tax after store-funded discounts and loyalty rewards are subtracted from the subtotal, per a report from Coupons in the News.
What Schnucks Says About the Money
Schnucks has denied the claims and any wrongdoing, but agreed to settle rather than go to trial. A company spokesperson, Paul Simon, said Schnucks did not retain the sales tax collected in the disputed transactions and instead remitted 100% of it to the Missouri Department of Revenue. The grocer is now updating its tax calculation methodology to ensure ongoing compliance and has agreed to change its sales tax practices so that reward point redemptions are treated as a pre-tax discount by March 31, 2027…