The Coop will return a 5 per cent across the board rebate on purchases made in the last fiscal year. Howard W. Davis, general manager, announced yesterday. Refund checks will be available to members starting October 10.

The rebate totals $465,000 for the year ending June 30, 1972, up 64 per cent from last year's distribution of $284,000. Total sales were up 5 per cent from $16 million to $16.8 million.

In previous years the Coop's rebate has been 2 per cent lower on charge purchases than on cash purchases. The differential between cash and charge has been abolished this year because state regulations do not permit extra finance charges on credit purchase.

Last year the Coop returned 4 per cent for cash purchases and 2 per cent or charges, in 1970 it paid 3 per cent and 1 per cent; and in 1969, 7.5 per cent and 5.5 per cent.

Sales Increasing

Sanford Litwin. Coop merchandise manager, said yesterday that the addition of "lower-priced lines of quality merchandise" is largely responsible for the increased sales. The Coop is making more effort now to respond to the purchasing patterns of students, he said.

Sales in July and August, the first two months of fiscal 1973, are about 11 per cent ahead of last year's sales. "Even though we are facing some rising costs, the outlook for another year with favorable profits is good," Davis said.

All Coop locations are showing increased sales and profits, he continued. Although he declined to give a profit breakdown by department. Davis said that textbook sales show no profit even though the volume is very high. "No college book store is making money on textbooks, because the mark-up is too low," he said.

One problem the Harvard Square Coop now faces is its crowded quarters, which limit the variety of goods any one department can stock. Davis said. The Square store is trying to meet this problem by redesigning some departments, including the tennis shop, which has been enlarged, and the insignia shop--a department carrying merchandise with Harvard emblems--which has been relocated. The Coop has also added a small natural foods department.