Remember kids, they also get to use the money they guilted off of you to reduce their tax liability because they get credit for donating your money!
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They do not, at least in the US.
It depends on exactly what the store is doing.
If the store is representing the extra charge as a donation to a specific charity, generally, the customer can deduct that.
If it's far more vague, like, "Give $10 to help poor kids in Africa" the ultimate destination for the funds could be the company's own ledgers, which it would then use for its own charitable activities and collect the tax deduction, as long as they "help poor kids in Africa."
And some stores are just lying. CVS, for instance, was sued as part of a class action suit when, after the company pledges $10 million to the American Diabetes Association, then collected money from customers to fund that pledge.
My favorite one is when our utility company asks me to donate to help pay for people's utilities like they aren't raking in record amount of cash.
Those charities have huge overhead. Very little money goes to the actual cause.
There are sites to check how much actually goes out. Check before you donate.
First, please don't link to Reddit...
Many Of The Largest Charities In America Are Giant Money Making Scams
http://thetruthwins.com/archives/many-of-the-largest-charities-in-america-are-giant-money-making-scams
Those donations you make can help them deduct from taxes, right?
Here me out before accusing me of being a billionaire toady.
Not really, at least not in the US. Charitable contributions are a deduction from taxable income, not a credit, so it is still a net financial loss to donate.
Where the benefit comes is the PR and power over the organization they donate to and its sphere of influence.
It is a net loss if you donate your own money, in this situation Company isn't donating from its own revenue. It is donating customers money.
If I donated 1000$ and claimed tax deductible it would be a net loss. But if I asked everyone for donations, raised 1000$, donated that and claimed tax deductible that wouldn't be a net loss.
Yes, which is why you should donate yourself if you are inclined to do so.
I think that's a myth as it isn't income it goes into a separate fund to transfer 1:1.
Even if it is revenue, it is still a net loss. All it does is reduce taxable income, which is still makes the donation a net loss. For anyone not aware, the current federal US corporate income tax rate is 21%. So if a company gives 100 dollars to charity, they only save 21 dollars in taxes, so they are still down roughly 79 dollars, depending on the state taxes of where they are incorporated.
Shell's audacity too...
And redirecting you attention on to the "offsets" scam too.
Ever wonder why climate change is such a problem if 1.5 pence per liter petroleum burnt can undo the damage? Spoiler: it can't. You can't sequester CO² for that cheap, and CO² isn't the only issue. "Offsets" are not certified by any trustworthy third party, and companies intentionally don't pry too much, so they can say "Oh sorry, didn't know" if anyone investigates and discovers they did squat-all.
Or just...donate the perfectly good food they constantly throw out into the cadged dumpsters designed to keep homeless people out... Litteraly would cost them nothing...
"But if we feed them then those broke homeless people won't come in and spend their (nonexistent) money on our food!" -upper management
Just wait until you get a tip prompt on a self checkout kiosk...
Don’t tip on those things. The company supplying those things are getting the cut. And it’s mandatory. They are an office space scam.
I hate these donate screens because I have no idea where the donation actually goes and i don't want to have to do a ton of research at the grocery checkout about whether its a good charity.
It's still fine.
Some big international store in europe is asking to buy food from them for full price and donate it to food bank. Fuckin hilarious for making profit on charity.
Just FYI this is a sort of scam. ~~The company donates the money on your behalf and they get the tax write-off for your donation while also appearing philanthropic for PR purposes~~. that's why they do it.
EDIT: US companies cannot do this in the US you can claim up to $300 on taxes. This is legit in the US.
@zombuey I've heard that a lot, but it is apparently not true unless the company claims your donation as a profit and then writes it off, which negates any tax benefit. I think it's more just a PR thing to make you feel good about that company while using your own money.
I think it’s more just a PR thing to make you feel good about that company while using your own money.
Yep, even without any direct financial benefit there is certainly a reason to engage in such behavior. The store gets you to associate it with the charity campaign and they'll make hay over the amount of donations they helped collect and their partnership with the charity. Drives for employee donations can also be used in a similar manner.
They cannot, and do not, claim your donations on their taxes.
I don’t trust them to actually donate anyway. How would you ever find out? I suspect these are scams to hold the money and get interest off it even if they do ultimately donate it.
People that give money for those charities are giving those companies free tax write offs.
You donate $10 or whatever. The company can then claim that $10 as a write off via donation to that charity. Campaign as a whole (either regional or national) collects $1M USD. Corporate accountants write off donation. Tax liability reduced.
That's not how tax write offs work. The only way to claim that money in a write-off would be for the business to also claim it as revenue. That would even out, with no tax savings. Businesses also don't handle donations that way, they usually serve as a collection agent that just passes your donations on without being able to claim it towards their revenue or their tax write offs. The only person who can write-off their donation is the person who actually made it.
The reason businesses do it is for marketing. They get to put out a press release saying "They helped donate $10 million to puppies without borders."
That’s not how tax write offs work
Jerry: So we're gonna make the Post Office pay for my new stereo now?
Kramer: It's a write-off for them.
Jerry: How is it a write-off?
Kramer: They just write it off.
Jerry: Write it off what?
Kramer: Jerry, all these big companies, they write off everything.
Jerry: You don't even know what a write-off is.
Kramer: Do you?
Jerry: No, I don't.
Kramer: But they do. And they're the ones writing it off.
Puppies do not recognize your silly imaginary borders and will commit zoomies across any such lines.
I intended on writing this comment yesterday but jerboa timed out on me. It's a common misconception and I understand how it gets spread, but I wish there was better knowledge and education of how taxes worked in general. Would make it easier for the average person to spot the ways companies do evade taxes, too.
To be fair, I bet these companies strike deals with the charitable organizations to in turn raise visibility of those charities among the company's customers.
PSA: most Americans can get up to $300 deducted from their annual taxes through donations.
They wouldn't be rich if they donated THEIR money, right?
Bad example, grocery stores usually have small margins and aren't making a lot of money off of you
This is actually true. But those small margins add up to a huge profit overall. Still, they probably could not afford to donate $20 per shopper.