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Back-to-School and Clothing Donation Bins: Who is Profiting From Your Generosity?

Sometimes only a small percentage actually makes it to charity

OTTAWA, ONTARIO -- (Marketwired) -- 08/27/14 -- Competition Bureau

When it comes to clothes for back-to-school, it often means out with the old and in with the new. But what to do with the old? The Competition Bureau is warning consumers to be aware of signs on clothing donation bins that may give the false impression that all proceeds go directly to charity when in fact, they support a for-profit business.

Clothing donation bins, often located in parking areas or near public buildings, encourage donations by featuring the names and logos of various charities. However, some do not clearly indicate that the bins are owned and operated by a for-profit business. Donated clothing is then sold by the for-profit business which, in turn, provides only a small percentage of the profit to the charities featured on the bin.

This raises concerns under the misleading advertising and deceptive marketing provisions of the Competition Act, as donors may be left with the false impression that their used clothing is going directly to charity when this is not the case.

As a result, the Bureau has issued warning letters to for-profit businesses operating donation bins in Vancouver urging them to review the matter and to take corrective action. The Bureau will continue to monitor the situation.

You can make a smart back-to-school donation by:


--  Browsing the website of your favourite charities about their local
    donation bin program before leaving home. A charity's website will often
    list the locations of their bins or offer alternative methods of
    providing donations; if you are unsure, contact the charity.
--  Check out the donation bins thoroughly - consider donating clothing in
    bins that clearly state who operates it and how the charity benefits;
--  Know which bins are operated by for-profit businesses - look for their
    names featured around the charity logos; and
--  Recognize that a bin promoting being "a proud sponsor" or "in support"
    of certain charities may not be giving you the best information to make
    an informed donation decision.

Quotes

"Misleading representations are a serious concern for consumers and the Bureau. Consumers should expect to receive the information they need from businesses in order to make informed decisions. When it comes to charities, it is important that people are not misled about who their donation is benefiting."

Victor Hammill - Assistant Deputy Commissioner of Competition, Pacific Region

"The generosity of our donors helps us to deliver essential services to a number of people in need of assistance in our communities. The operation of donation bins by for profit businesses, without adequate disclosure of that fact, is significantly hampering our ability to provide such assistance. We strongly support the actions of the Competition Bureau, as we want those who choose to donate to do so knowing it will directly benefit the charitable organizations represented on donation bins."

John Neilson - President, Developmental Disabilities Association

Associated Links

View a model of the warning letter.

Learn how to protect yourself from fraud and scams in The Canadian Edition of the Little Black Book of Scams

Follow us on Twitter: @CompBureau

The Competition Bureau, as an independent law enforcement agency, ensures that Canadian businesses and consumers prosper in a competitive and innovative marketplace.

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