Inside Retail Services News

What retailers should know about soliciting for charities and social causes

Retailers are increasingly soliciting charitable donations or sharing a portion of their sales with charities or social causes. You might have noticed this trend if a sales clerk ever asked you to “round out your purchase” to the next dollar to donate the difference from the actual sale price to a food bank or other charity.

The organization known as Engage for Good estimates that spending on such causes has steadily climbed from $816 million in 2002 to $2.05 billion in 2017. Retailers might be considering becoming part of this trend.

It’s important to know that there’s a right and wrong way to engage in what’s come to be known as “cause marketing.” It can be good public relations for companies, afford them tax incentives and be a big assist to deserving charities.

Yet, consumer protection laws may dictate certain standards and requirements, depending upon the situation of the retailer.

Assistant state Attorney General Joshua Studor has prepared a useful presentation of guidelines for participating in cause marketing. His presentation is not legal advice but simply a general overview of considerations and best practices retailers should be aware of and follow:

  • Consult with an attorney on possible state legal requirements and practices
  • It’s important to match the goals and values of the charity with the retailer asking for the donation
  • Explain the promotion clearly to customers including the name of the charity or cause and where it operates
  • Secure the charity’s permission before using its logo
  • Know the fundraising campaign’s time limit and disclose it clearly
  • Set and disclose maximum and minimum donation limits, if they apply

Check with neighboring states’ requirements if yours is a multi-state campaign.

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