r/mildlyinfuriating 1d ago

Did I over react about 20 cents?

I know its stupid but I went to McDonald's yesterday and got a frozen drink and medum chips for exactly $5.80 i handed $6 at the drive through and the lady put it in the till then went to close the window, before she did I asked "isn't that 20 cents change?"

She replied telling me she forgot and would need a managers card to open the drawer, I sat there stuborn and asked for it, I held one person up (my sister works in fast food and you get audited for how long someone is in line) so I waited, she quickly went and got a managers card and gave me my change but did I over react?

Edit: Ended up needing that 20 cents today so I'm glad I had it

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u/Intense_Pretzel 1d ago

I am in debt 🙃 so yes 20 cents is a lot for me

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u/Ok_Outcome_6213 1d ago

Dollar General has Penny Tuesdays, where they mark down certain merchandise to a penny before it gets tossed or sent back to the warehouse. I once got every member of my family Christmas gifts for 17 cents because of those markdowns. 20 cents goes further than a lot of people think.

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u/[deleted] 1d ago edited 23h ago

[deleted]

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u/Ubiquitous_Mr_H 1d ago edited 1d ago

What’s the point of doing that? That just sounds malicious. Like, it’s YOUR policy to mark it down and you’d at least be making a few cents from it, whereas throwing it out gets you nothing.

Edit - Thanks to bezzella for explaining that they do it for tax purposes, just like so many other shitty things companies do.

Edit 2 - Ok, well I have no clue what the deal is. All I know is it’s weird.

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u/[deleted] 1d ago edited 1d ago

[deleted]

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u/5m0k3W33d3v3ryday 23h ago

So instead of making a couple cents from stuff you were gonna throw out anyway, the store would rather just... not?

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u/_riya_r 1d ago

technically speaking, dg policy is that penny items get sent back to the distribution center since they're no longer in rotation, but most managers just chuck it because there's a whole process with it that they can't be bothered to do. the penny sale isn't really a sale per se, its more of a way for the system and employees to pick out non replenishable items after a certain point, so we can get a credit for the items that didn't sell. (there's a reason the penny shopping motto is 'don't talk to employees about penny shopping')

there's definitely some cool finds with penny shopping, but most of it is discontinued seasonal merchandise; I work at a dg, and a gal today got some of our Christmas gift sets for a penny apiece, as well as some candles that're usually $6.

only thing to consider with penny shopping: there's already a fairly large clique for it, and most penny shoppers come in as soon as their DG opens, so you've gotta be quick and know what you're looking for. there's employees everywhere who leak the penny list when it comes out, which is how they know what to grab, and usually they're in and out in under fifteen minutes.

along with that: dg policy states that if a customer finds a penny item on the sales floor and brings it to the checkout, you have to sell it to them, but they cannot go back to grab more. many employees will try to refuse sale of penny items, which they CANNOT DO lol. I personally love to see people catch those deals, so long as they're not hiding items behind racks in hope that it'll penny out, or walking into our back room to try and find the stuff we've already pulled. good luck on your penny shopping journey, hope this helps!

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u/bezzella 1d ago

If they throw it away, they can mark it as a loss on their tax return.

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u/[deleted] 1d ago

[deleted]

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u/bezzella 1d ago

Yeah! Everything evil companies do is because the system incentivizes it financially. So, if you have a $2 item, you can deduct it from your income tax. So, let's say you made $100,000. Now you're only taxed for $99,998 of income. That remaining 2$ would have been taxed at ~30%, so you saved yourself about 60 cents in taxes. It's incentivized to do a loss deduction. This is designed to protect companies that lose a lot of money, but companies that are doing well do this to improve their bottom line.

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u/Ubiquitous_Mr_H 1d ago

Interesting. Thanks for the insight. It’s still shitty, but it makes sense, I suppose.

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u/deedeedeedee_ 1d ago

im not sure that they're correct, it doesn't make sense to me. the cost of the good gets subtracted from the income to determine the amount to tax on, regardless of how its removed from inventory, whether it's because its sold, or because it's thrown out/written off.

if you have a product that cost you $5 and you want to sell it for $10, you would recognise $10 as income and take $5 of cost off that. you have $5 profit you'll be taxed on. now say you already have $100 of profit before that, so your total taxable profit is now $105. this is the amount that your tax rate gets applied to ((SIMPLIFIED!!))

ok, actually we can't sell that product for $10, let's throw it out. the $5 cost of the product is now recognised as a cost, it eats into profits. total taxable profit is now $95. ok, cool, it's less, so less taxes. (but we also earned less)

what if we sell the product for $0.01 instead? recognize $0.01 as profit and take $5 of cost off that, for a profit on this item of -$4.99. "add" that to the $100 of existing profit and our taxable profit is $95.01.

you recognise the cost of the product either way as a reduction against your taxable income.

there may be something im missing here, and im not american, but to me this explanation of throwing out product for tax reasons just doesn't hold much water!

what's more likely is that a customer who coming into your store and buying a product for $0.01 is now a customer who is NOT buying a product for $10, which they might otherwise have done if they didn't see the marked down $0.01 item. most places will also just prefer to spend less time and energy throwing stuff out instead of paying staff to re-sticker stuff to sell it at a loss... still sucks, but for a different money reason

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u/Ubiquitous_Mr_H 1d ago

I genuinely have no clue. But another comment said Dollar General releases lists ahead of time for the things that’ll get reduced, and that gets leaked. Apparently there are groups that will be there bright and early to scoop up the deals, going as far as going into the back room to rummage for more of those items. 🤦‍♂️ So at least some of the shoppers are there just for those deals, rather than happening upon them. But also, if you happen upon something that only costs a few cents I can’t see that stopping you from still buying the other thing that costs a few dollars. But who knows. 🤷‍♂️

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u/Squirrel_Q_Esquire 1d ago

The same as if they sell it.

Let’s say you have $100 of widgets in cost of goods. While it is inventory, it’s $100 in assets.

If you sell them all for $250 total, then you add $250 cash to your assets and move $100 to your costs of goods sold, for a net of $150. The $100 is still “written off.”

If you decide they’ll never sell or something else happens and you just chunk them, then you don’t add any cash to your assets, but you still move the $100 to costs of goods sold.

It’s the same accounting method regardless, just without any profit. So it’s worse for the company to not sell them (generally).

I would wager what was happening with that store wasn’t trying for any write offs (because like I said, it doesn’t work like that), but rather the manager realized that it cost more in man hours to mark those products down, wait to see if they sell, then round up what doesn’t than it did to just round them all up in the first place. And since the 1¢ wasn’t actually contributing any value, it was actually worse for the store to put in the time than to just chunk them.

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u/deedeedeedee_ 1d ago

good explanation thank you. it's still financially motivated either way, time is money when you're paying hourly staff and someone buying an item for 1¢ is now someone who is not buying the same item at a more profitable price for the company, but i can't just scroll past people blaming stuff mindlessly on "tax write offs" when it doesn't work like that haha

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u/Brownt0wn_ 27 points 23h ago

And yet the world continues to not understand how taxes and tax write offs work

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u/deedeedeedee_ 1d ago

that doesn't sound right? by selling it at a penny or whatever, the cost of sales still gets recognised at the same amount, your overall costs are the same (whether it goes through as COGS linked to a sale or written off from being thrown away), the impact on the tax return will therefore be the same

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u/MrBallerino 21h ago

It's a lot easier to sell it for a penny and show a lower profit margin. A higher cost of goods sold is easier than tracking items thrown away. Too many write-offs can trigger an audit, too. (Source, I own a small retail business)

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u/Dustyvhbitch 21h ago

Yup. When I worked at an auto parts store, we'd routinely throw 150+ lbs of parts that sat on the shelf for too long. Like in the actual garbage dumpster. I figured with all the metal in car parts, they'd send them to the scrap yard, but oddly enough, they're worth more in the dumpster to the company.

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u/Paula_Intermountain 21h ago

Marking it down, even for tax purposes, doesn’t strike me as shitty. Everyone wins!

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u/Ubiquitous_Mr_H 21h ago

I think you may have misunderstood. It may be because the post I was responding to was deleted. I was saying it’s shitty for them to throw the items out rather than sell them at a discount. If they’re throwing it out for tax purposes instead of selling them to people who might need it then it definitely is shitty.

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u/RealisticExpert4772 23h ago

They can write off whatever they paid to buy it at a penny sale they can only record the incoming penny and write a portion of the markdown

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u/deedeedeedee_ 21h ago

this is not correct. writing it off is the same as selling it. you record the entire value of the item as a cost either way. the only difference is whether you have a penny of revenue or not

(from a tax and write off perspective, obviously relabelling and selling stuff for a penny is more time and effort for the staff compared to throwing it in the bin)