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Thursday, March 28, 2024

Consumers Beware – Cause-related marketing calls for caution

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For many, the holiday season is a time of generous giving; people not only shower their loved ones with thoughtful gifts, but also open their hearts — and wallets — to those less fortunate. 

That giving spirit makes the holidays a perfect time for retailers to engage in cause-related marketing, a sales strategy in which a business makes a promise to donate profits from sales toward alleviating some sort of social ill.

For socially conscious shoppers buying, say, a Black Lives Matter shirt, it might seem like a no-brainer — it’s the perfect opportunity to give a gift that spreads a meaningful message, while proceeds paid for the shirt contribute to the cause. However, consumer protection groups say buyers should beware: Just because a company says it’s donating proceeds, that doesn’t make it true. Bennett Wiener, chief operating officer of the BBB Wise Giving Alliance, the major U.S. standards group for charity accountability, explained some of his concerns in an interview with consumersunion.org.

“In almost all cause-marketing situations, historically, you’re going to have less than 10 percent going to the charity, and in most cases much less than 10 percent,” Wiener said. “And there is no federal or state law that says you have to disclose what this amount is.”

Wiener recommends looking online for information about both the business and the charity using sites like bbb.org and guidestar.org.

Consumer Reports cautions shoppers to be skeptical about claims that retailers donate “a portion” of their proceeds, without an amount specified. Consumers should also consider the product by itself, without the prospect of proceeds benefiting a good cause.

“Even if the retailer’s donation policy satisfies you, don’t give it your business just because part of the sale supports a good cause,” Consumer Reports advises. “The service, price, convenience and quality should be equal to what you get elsewhere.”

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