Checkout Charity Donations Don’t Help Store Tax Deductions

Layne Radlauer

Business

14th June 2021

Checkout Charity Donations Don’t Help Store Tax Deductions

Stores act as middlemen between the donor and the charity (Getty Images).

The Claim

Giving charity donations in grocery store checkout lines provides companies a tax break.

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Samantha Bunten

Adam Stachowiak

Coward of the Cottage

Socialist Mormon

Ujjal Hossain

Emerging story

Social media users have recently been spreading the claim that the charitable donations you often see in grocery store checkout lines provide tax reductions for the businesses, rather than genuinely helping charity organizations.

The misconception makes intuitive sense. When someone gives to charity, the government often issues a tax deduction. Paying fewer taxes incentivizes people and organizations to donate, which is generally a good thing. So, when a store asks customers to donate, it makes sense to assume that they’re using it as a tax deduction.

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Misbar’s Analysis

Businesses don’t benefit from point-of-sale donations. They are just middlemen between the donor and the charity, so the donation doesn’t show up on their business receipts nor do they report it as an expense. You could even save your receipt and claim it on your own taxes to get a deduction yourself! Businesses do get a deduction if they give a percentage of their own sales to charity, however.

In 2018, charities raised $486 million through point-of-sale donations. If this myth is dispelled, that number could increase even higher.

Still, it’s worth looking into giving to charities directly. Not at all charities are equally helpful regardless of cause, so going to websites such as Charity Navigator is helpful when deciding where to give.