5 ms·

This essence of the CVS misbehavior: >According to the complaint, prior to the completion of a customer’s transaction, the checkout screen would prompt the cus

by jasode 4y ago

This essence of the CVS misbehavior: >According to the complaint, prior to the completion of a customer’s transaction, the checkout screen would prompt the customer with several boxes of pre-selected amounts (and an opt out option) to donate to the American Diabetes Association (ADA). The plaintiff alleges that CVS did not merely collect the customer’s donations and forward them to the ADA, but instead, counted the donations toward a legally binding obligation of $10 million that CVS had made to the ADA. If the complaint is ultimately proven true, it contradicts a Lifehacker March 2021 story[1] saying that doesn't happen : >Case in point: A tweet with erroneous information went viral last week, claiming that participating grocery stores have already handed out donations to nonprofit partners for a tax write off, and are merely collecting customer money as a reimbursement. The donation, according to the tweet, is merely a ruse for the sake of profiteering under the guise of charity. (The LifeHacker article was before ChatGPT so we can't blame A.I. generated nonsense in this case.) EDIT to replies about the sequence of donate-then-collect vs collect-then-donate: I don't believe this is actually a big difference in terms of the spirit of the donation from the perspective of the consumer. If one reads the splashy PR releases from CVS about the $10 million donation : - https://www.cvshealth.com/news-and-insights/press-releases/cvs-health-announces-10-million-commitment-to-the-american https://www.cvshealth.com/news-and-insights/press-releases/c... - https://diabetes.org/newsroom/press-releases/2021/10-million-commitment-to-american-diabetes-association-by-cvs-health-reach-5-million-patients-transform-overall-health-outcome https://diabetes.org/newsroom/press-releases/2021/10-million... ... CVS wants the positive associations with that $10 million donation. The unstated implication is that CVS will pay $10 million out of their profits. Normal readers would not expect that self-congratulatory press release to mean they will actually add donation prompts at the checkout so it will be the customers paying that $10 million donation. The public would think it feels like the deception in the LifeHacker article even if the sequence actions of collect-then-donate is reversed. [1] https://lifehacker.com/check-out-donations-arent-a-scam-actually-1846432598 https://lifehacker.com/check-out-donations-arent-a-scam-actu...

thaumasiotes 4y ago
Those two paragraphs don't contradict each other. You can have CVS collecting money, disbursing money to the ADA, and counting the money it disburses toward its legal obligation to give money to the ADA, all in that order. The Lifehacker story says it's not disbursing the money first and collecting it second.
- SamBam 4y ago
  The Lifehacker article definitely implies that stores are not counting your donation as their own donation. > it will not include your donation as part of its business receipts, or income, nor will it claim the charitable gift as an expense. (And the order of operations is not so relevant. From a tax perspective, there's no difference if it forwards your donations and calls it their own, or makes its own donation and reimbursing itself with your donation. In both cases it doesn't lose any money and gets to illegally claim a tax deduction.) This particular case is about a legal obligation, not a tax credit, but in either case it's unethical and illegal to call customer's donations your own.
  - thaumasiotes 4y ago
    > but in either case it's unethical and illegal to call customer's donations your own. What? That makes no sense. You put in the effort and delivered the money. Without your effort, the money would never arrive. In every possible sense, the customer's donations are donations from you. Politicians are always evaluated by how much fundraising they can do for their party. They are never evaluated by how much of their fundraising came out of their own pocket, because... that metric just isn't relevant to anyone or anything. Same goes for salesmen. If you're responsible for $10,000,000 / year of revenue, does it matter to anyone that you didn't personally purchase $10,000,000 / year of products? Of course not.
    - SamBam 4y ago
      The grocery stores are getting the reflected credit for being involved in collecting the donations, of course, which is why the do it, but they absolutely do not get to have the legal credit for actually donating the money. This is absolutely cut-and-dry, and echoed in the Lifehacker article, and here [1] and here [2]. 1. https://apnews.com/article/fact-checking-000329849244 https://apnews.com/article/fact-checking-000329849244 2. https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-those-checkout-donations-0 https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-...
      - 4y ago
Navarr 4y ago
There's a good difference between the two things, actually. What I believe this Lawsuit is alleging is that CVS promised ADA that they would give them $10m, and CVS is saying that customer donations are part of that $10m. The other aspect is the tax aspect. What people are concerned about is that a company is profiting off their "donation" which cannot happen, even if they are merely reimbursing themselves. * Company donates $10 and so does not have to pay the income tax * Customer donates $10 through company. This is $10 of income to the company, which requires the income tax. In such a scenario, the company gets no financial benefit - though they may get a social benefit in what they're claiming to donate
tedunangst 4y ago
Why do they keep saying "legally binding obligation"? Like a court settlement? What were the terms?
- jasonwatkinspdx 4y ago
  I'd assume just a sponsorship contract where CVS agreed to pay and in exchange got to feature the ADA partnership in advertisements and such.
  - tedunangst 4y ago
    Sounds like the lawsuit will be great news for ADA when they go to negotiate next year's contract.
    - thaumasiotes 4y ago
      Why? The ADA isn't suing and there is no allegation they've been harmed. We can safely assume they understood how the CVS pledge drive would operate. Nonprofits routinely ask large donors who come to them to make a donation to hold off on the donation and instead announce a pledge match. ("For every $1 donated to this charity over the next three months, I will donate $1 of my own, up to $15,000,000.") They do that because they prefer to try to turn the $15,000,000 they were getting anyway into $40,000,000 when $25,000,000 worth of small donors see the match announcement and think "this doubles the value of my pledge!". No charity is going to be shocked at the idea of a large donor committing to donate a certain amount of money that they raise from other people. The ADA is unlikely to support this lawsuit, because if it wins, it hurts the ADA's fundraising prospects.
citizenpaul 4y ago
Lifehacker was bought out long ago and is no longer a source for real information. It's owned by G/O media that owns other respectable gems like the onion, jezebel, kotaku. G/O is most famous for destroying other honest journalism sites after they publish unfavorable investigative reporting.
ipaddr 4y ago
Customers want the charity to have the dollar they gave. The donation doesn't make it to the charity. You end up donating to the store.

by jasode 4y ago

thaumasiotes 4y ago

Those two paragraphs don't contradict each other. You can have CVS collecting money, disbursing money to the ADA, and counting the money it disburses toward its legal obligation to give money to the ADA, all in that order. The Lifehacker story says it's not disbursing the money first and collecting it second.

SamBam 4y ago
The Lifehacker article definitely implies that stores are not counting your donation as their own donation. > it will not include your donation as part of its business receipts, or income, nor will it claim the charitable gift as an expense. (And the order of operations is not so relevant. From a tax perspective, there's no difference if it forwards your donations and calls it their own, or makes its own donation and reimbursing itself with your donation. In both cases it doesn't lose any money and gets to illegally claim a tax deduction.) This particular case is about a legal obligation, not a tax credit, but in either case it's unethical and illegal to call customer's donations your own.
- thaumasiotes 4y ago
  > but in either case it's unethical and illegal to call customer's donations your own. What? That makes no sense. You put in the effort and delivered the money. Without your effort, the money would never arrive. In every possible sense, the customer's donations are donations from you. Politicians are always evaluated by how much fundraising they can do for their party. They are never evaluated by how much of their fundraising came out of their own pocket, because... that metric just isn't relevant to anyone or anything. Same goes for salesmen. If you're responsible for $10,000,000 / year of revenue, does it matter to anyone that you didn't personally purchase $10,000,000 / year of products? Of course not.
  - SamBam 4y ago
    The grocery stores are getting the reflected credit for being involved in collecting the donations, of course, which is why the do it, but they absolutely do not get to have the legal credit for actually donating the money. This is absolutely cut-and-dry, and echoed in the Lifehacker article, and here [1] and here [2]. 1. https://apnews.com/article/fact-checking-000329849244 https://apnews.com/article/fact-checking-000329849244 2. https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-those-checkout-donations-0 https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-...
    - 4y ago

Navarr 4y ago

There's a good difference between the two things, actually. What I believe this Lawsuit is alleging is that CVS promised ADA that they would give them $10m, and CVS is saying that customer donations are part of that $10m. The other aspect is the tax aspect. What people are concerned about is that a company is profiting off their "donation" which cannot happen, even if they are merely reimbursing themselves. * Company donates $10 and so does not have to pay the income tax * Customer donates $10 through company. This is $10 of income to the company, which requires the income tax. In such a scenario, the company gets no financial benefit - though they may get a social benefit in what they're claiming to donate

tedunangst 4y ago

Why do they keep saying "legally binding obligation"? Like a court settlement? What were the terms?

jasonwatkinspdx 4y ago
I'd assume just a sponsorship contract where CVS agreed to pay and in exchange got to feature the ADA partnership in advertisements and such.
- tedunangst 4y ago
  Sounds like the lawsuit will be great news for ADA when they go to negotiate next year's contract.
  - thaumasiotes 4y ago
    Why? The ADA isn't suing and there is no allegation they've been harmed. We can safely assume they understood how the CVS pledge drive would operate. Nonprofits routinely ask large donors who come to them to make a donation to hold off on the donation and instead announce a pledge match. ("For every $1 donated to this charity over the next three months, I will donate $1 of my own, up to $15,000,000.") They do that because they prefer to try to turn the $15,000,000 they were getting anyway into $40,000,000 when $25,000,000 worth of small donors see the match announcement and think "this doubles the value of my pledge!". No charity is going to be shocked at the idea of a large donor committing to donate a certain amount of money that they raise from other people. The ADA is unlikely to support this lawsuit, because if it wins, it hurts the ADA's fundraising prospects.

citizenpaul 4y ago

Lifehacker was bought out long ago and is no longer a source for real information. It's owned by G/O media that owns other respectable gems like the onion, jezebel, kotaku. G/O is most famous for destroying other honest journalism sites after they publish unfavorable investigative reporting.

ipaddr 4y ago

Customers want the charity to have the dollar they gave. The donation doesn't make it to the charity. You end up donating to the store.