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I accidentally figured out how to avoid sales tax at GameStop

soloshv 1,864 613 January 5, 2016 at 04:32 PM in Other
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Last Edited by soloshv January 5, 2016 at 04:35 PM
I rarely shop at GameStop so i guess that's why I never noticed this before.

during GameStop's buy 2 get 1 free used game/device promo, i bought a total of 6 games. mix of 3Ds and Wii U games. I found some of them cheaper elsewhere and 1 game (Kid Icarus Uprising) didn't work at all. so i decided to return everything. but i didn't have the Credit Card that I original purchased this stuff with on me. their credit card terminals are archaic and require the original card to process refunds. When you don't have the original CC on you, they apparently put your refund onto a trade in card. they put the ENTIRE amount i paid on the card, sales tax and all.

I decided to use this credit plus some that I had from before to purchase a new zelda hyrule 3Ds, currently priced at $175. normally i would have had to pay $190 with tax (NYC tax is about 9%). when you use your trade in credit to buy stuff at GameStop, they don't charge you sales tax, they just deduct the trade in balance from the price of the item, then you just owe tax on the remaining balance.

I had $181 worth of credit, after buying the 3Ds i now have $6 left on the trade in card. the sales tax are no where to be found!

I don't know if it's worth the effort to exploit this loop hole, but if you live in a state that has 8%-10% sales tax, and you want a PS4, you can save $30 to $40 this way.

thoughts? anyone else notice this?

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#2
Is "trade-in" credit the same as "in-store" credit that goes on gift cards? I have had that before, but didn't notice this. But I wasn't looking either...
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#3
Tax on the remaining balance?
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#4
Quote from mrbobofbobs View Post :
Tax on the remaining balance?
Whatever your trade in credit doesn't cover. Say you have $30 in credit, but the game costs $60, you'll only pay tax on the $30 not covered by the credit.

Quote from lsalmond View Post :
Is "trade-in" credit the same as "in-store" credit that goes on gift cards? I have had that before, but didn't notice this. But I wasn't looking either...
Yep. The card they gave me says trade in.
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Last edited by soloshv January 5, 2016 at 06:24 PM
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#5
Real way to save tax at Gamestop:
Don't shop at Gamestop.
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#6
Quote from Novakingwai View Post :
Real way to save tax at Gamestop:
Don't shop at Gamestop.
lol. sometimes you don't have a choice. i really wanted that hyrule new 3Ds. also picked up a used copy of bayonetta 2 for $30. it was like new. it's going for north of $75 on fleabay. the morons at Nintendo decided to put that game out of print.
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#7
Classy.
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#8
Quote from solomonshv View Post :
lol. sometimes you don't have a choice. i really wanted that hyrule new 3Ds. also picked up a used copy of bayonetta 2 for $30. it was like new. it's going for north of $75 on fleabay. the morons at Nintendo decided to put that game out of print.
holy hell, I had no idea about that for Bayonetta. I might list my copy of the game. I'm pretty sure I bought it via SD for around $30.
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#9
Quote from solomonshv View Post :
I rarely shop at GameStop so i guess that's why I never noticed this before.

during GameStop's buy 2 get 1 free used game/device promo, i bought a total of 6 games. mix of 3Ds and Wii U games. I found some of them cheaper elsewhere and 1 game (Kid Icarus Uprising) didn't work at all. so i decided to return everything. but i didn't have the Credit Card that I original purchased this stuff with on me. their credit card terminals are archaic and require the original card to process refunds. When you don't have the original CC on you, they apparently put your refund onto a trade in card. they put the ENTIRE amount i paid on the card, sales tax and all.

I decided to use this credit plus some that I had from before to purchase a new zelda hyrule 3Ds, currently priced at $175. normally i would have had to pay $190 with tax (NYC tax is about 9%). when you use your trade in credit to buy stuff at GameStop, they don't charge you sales tax, they just deduct the trade in balance from the price of the item, then you just owe tax on the remaining balance.

I had $181 worth of credit, after buying the 3Ds i now have $6 left on the trade in card. the sales tax are no where to be found!

I don't know if it's worth the effort to exploit this loop hole, but if you live in a state that has 8%-10% sales tax, and you want a PS4, you can save $30 to $40 this way.

thoughts? anyone else notice this?
You paid sales tax on your original purchase. If you paid sales tax on the 3DS it would have been DOUBLE TAXATION on any amount up to the amount of the original transaction.

Your post is EMBARASSING! LMAO
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#10
Quote from jbonez21 View Post :
You paid sales tax on your original purchase. If you paid sales tax on the 3DS it would have been DOUBLE TAXATION on any amount up to the amount of the original transaction.

Your post is EMBARASSING! LMAO
It's not double taxation as long as they refunded the full amount of the original purchase(s) onto the gift card. The part that I doubt is true is where he said they don't charge sales tax if you pay via gift card. That would mean that they have to charge sales tax anytime you buy gift cards for someone which I believe is illegal.
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#11
Quote from godfather927 View Post :
It's not double taxation as long as they refunded the full amount of the original purchase(s) onto the gift card. The part that I doubt is true is where he said they don't charge sales tax if you pay via gift card. That would mean that they have to charge sales tax anytime you buy gift cards for someone which I believe is illegal.
He didn't use a gift card he used store credit. This makes a huge difference because if he were making a purchase using a giftcard he would be charged sales tax on the item at the time of purchase. If he's using a store credit card it won't charge him tax....

Why? Because the store credit card already included the tax he paid (on his credit card) towards the initial purchase that was returned. So if they were to charge him tax on the 3DS when using the store credit card he would be charged tax TWICE.
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#12
Actually I just read it again and noticed he said they put it on a trade-in store credit and not a gift card. Apparently some gamestops don't charge you tax when you make any purchases via that method, but it varies by region. Interesting exploit, though I'm not sure how repeatable it would be since it requires the clerk to refund you the amount as store credit instead of a gift card. Seems highly YMMV but for states that charge 10% as you mentioned, it might be worth a shot on high-dollar items. And of course, before another shit storm starts brewing, yes this is most definitely unethical and quite possibly illegal.


https://www.reddit.com/r/GameStop...in_credit/

Quote from jbonez21 View Post :
He didn't use a gift card he used store credit. This makes a huge difference because if he were making a purchase using a giftcard he would be charged sales tax on the item at the time of purchase. If he's using a store credit card it won't charge him tax....

Why? Because the store credit card already included the tax he paid (on his credit card) towards the initial purchase that was returned. So if they were to charge him tax on the 3DS when using the store credit card he would be charged tax TWICE.
You're right, I missed that part initially.
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Last edited by godfather927 January 6, 2016 at 06:25 AM
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#13
Quote from godfather927 View Post :
Actually I just read it again and noticed he said they put it on a trade-in store credit and not a gift card. Apparently some gamestops don't charge you tax when you make any purchases via that method, but it varies by region. Interesting exploit, though I'm not sure how repeatable it would be since it requires the clerk to refund you the amount as store credit instead of a gift card. Seems highly YMMV but for states that charge 10% as you mentioned, it might be worth a shot on high-dollar items. And of course, before another shit storm starts brewing, yes this is most definitely unethical and quite possibly illegal.


https://www.reddit.com/r/GameStop...in_credit/


You're right, I missed that part initially.
It's not an exploit, the system appears to be working correctly. He paid tax on the initial purchase (paid on his credit card) which now exists as store credit.

I agree with you - I'm going to White Knight and say that it would be illegal to try to knowingly convert your funds to circumvent tax EEK!
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Last edited by jbonez21 January 6, 2016 at 06:28 AM
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#14
Quote from jbonez21 View Post :
It's not an exploit, the system appears to be working correctly. He paid tax on the initial purchase (paid on his credit card) which now exists as store credit.

I agree with you - I'm going to White Knight and say that it would be illegal to try to knowingly convert your funds to circumvent tax EEK!
That's the exploit. They are obviously not supposed to give him trade-in credit, but rather a gift card instead. Also, per the reddit link, it seems that some areas now tax purchases made using that method of payment, so it appears they've caught on in some areas.
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#15
Quote from godfather927 View Post :
That's the exploit. They are obviously not supposed to give him trade-in credit, but rather a gift card instead. Also, per the reddit link, it seems that some areas now tax purchases made using that method of payment, so it appears they've caught on in some areas.
Oh yeah that make sense, someone at GS must have just processed his return incorrectly
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