Patronage refunds: the cooperative way to share profits

The concept of sharing wealth and cooperative ownership is directly rooted in Cooperative Principle #3, Member Economic Participation. It states, “Members contribute equally to, and democratically control, the capital of the cooperative. This benefits members in proportion to the business they conduct with the cooperative rather than on the capital invested.”

Implementing patronage refunds strikes a balance between providing tangible benefits for our owners while maintaining a sustainable business model.


A cooperative way of business

Patronage refunds are directly tied to the health and profitability of the Co-op and to the essential role of the owner. The owner-elected Board decides to allocate earnings to the owners only after ensuring that Mariposa has actually made a profit. And since the business is more likely to show a profit if our owners shop, patronage refunds support a mutually beneficial relationship.

If we were to continue giving owner discounts, the Co-op’s earnings would be given away whether or not they actually exist. This year, the Co-op budgeted nearly $140,000 for the register discount. With the money we are saving by discontinuing the owner discount, we can increase staff compensation, expand our sales programs, and reinvest money in our community through our outreach initiatives. The important takeaway is that the money we save stays within the Co-op and our community.

How did we get here?

Discontinuing the owner discount was decided by management with support from the owner-elected Board. The decision required an in-depth knowledge of our financials and our day-to-day operations. The feedback we received from owners during the patronage info sessions and March owner meeting helped shape how we will reinvest the savings to meet the needs of our owners and neighborhood.

Membership is ownership

You may now be asking yourself, “Ok, so Mariposa is saving money, but why should I continue to be an owner?” There are so many reasons to be an owner at Mariposa! Beyond directly investing in your neighborhood and the opportunity to earn patronage refunds, owners (are):

  • Vote on Co-op decisions.
  • Eligible to run for the Board of Delegates.
  • Receive a 10% discount on bulk orders from our distributors.
  • Receive a 10% register discount for being a working owner.
  • Receive discounts at our Community Partners, many of which are just down the street.
  • Add credit to their accounts for convenience and/or budgeting.

2016 was a unique year for Mariposa and our owners. In addition to receiving an owner discount at the register, owners will receive a patronage dividend based on their spending throughout the year. While this year’s refunds may seem small, this is because refunds are being offered in addition to significant savings from the register discount during 2016. In future profitable years, patronage refunds may be significantly more.

What’s next?

Mariposa Food Co-op will discontinue the owner discount at the end of the day on Wednesday, May 31st. Our staff is working hard to begin expanding upon owner benefits and outreach initiatives. Owners should continue to shop on their accounts to track patronage for the future and receive new benefits that will be tied to owner accounts.

FAQ

 

Authored by Elise Greenberg, Owner Services Coordinator.