The Coop has cut its refund rate this year by two per cent, from ten to eight per cent refund for cash purchases and from eight to six per cent for credit purchases.

It is the first drop in the rate since 1950. According to John G. Morrill, general manager of the Harvard Cooperative Society, the new lower rates were forced by increased expenses last year.

The general manager said Friday that this summer's annual audit of Coop expenses, received last week, determined what the new lower rates would be. He cited new and continuing construction costs, real estate taxes, and interest as causes.

Future Increase Possible

Morrill said it was possible that the refund rate might be increased next year, although not back to the old ten-eight figure, if the Coop's volume continued to increase in the coming year. Last year, the Coop's volume increased from $12.1 million to $14.1, Morrill said, and if it continued to rise to $16 or $17 million, then a higher refund rate would be likely.

The new checks refunding the established percentage of a Coop member's purchases during the previous year will be available at the Coop beginning Oct. 13.

Morrill doubted if the Coop's refund rate would return to the old ten-eight figure during the Coop's "reconstruction period." He listed the Coop's year-old text book annex on Palmer St. and the new Medical School Coop, scheduled for completion next year, as expense burdens which helped force the lower refund rates.

B-School Coop

He said there were also tentative plans for a new Business School Coop. Morrill said he met last week with George P. Baker, dean of the Business School, to discuss that possibility.

Also charged to last year's Coop expenses were the costs of retailoring the new text book annex and Palmer St. itself to avoid a suit by Sheldon Dietz '41, another Palmer St. property owner. Dietz's fight against the annex delayed construction nine months, Morrill said, and cost the Coop about $400,000 extra.

In the past, the Coop was able to maintain the ten-eight refund rate despite rises in expenses by drawing from its yearly surplus in dealings with non-members, Morrill said. (Non-members account for about 20 per cent of yearly business.) But tax laws passed in 1962 no longer allow that, the general manager explained.