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Nov 12, 2023

CVS Lawsuit: Should You Donate to Charity in the Checkout Line?

Valerie DeBenedette has over 30 years' experience writing about health and

Valerie DeBenedette has over 30 years' experience writing about health and medicine. She is the former managing editor of Drug Topics magazine.

Nick Blackmer is a librarian, fact-checker, and researcher with more than 20 years’ experience in consumer-oriented health and wellness content.

Morsa Images / Getty Images

Would you like to add a dollar to your bill to fight cancer or diabetes or to some other worthy cause?

That question is exceedingly common at grocery store and pharmacy checkouts, especially during the holiday season.

Although most checkout donation campaigns can generate goodwill as well as funding, CVS Health was recently hit with a lawsuit over its checkout campaign for the American Diabetes Association (ADA).

New York resident Kevin McCabe filed a lawsuit against CVS after he was asked to donate to the ADA at the pharmacy checkout in November, which is National Diabetes Month. His lawsuit claimed that CVS did not reveal that the donations collected during the campaign would be part of a pledge the company made in 2021 to donate $10 million to the ADA over three years. The suit charged that CVS was using customer donations to help fulfill that pledge rather than sending the money directly to the ADA.

News of the lawsuit on social media generated enough conversation for consumers to think twice about whether checkout donations are worthwhile. How can you know where your money is really going? And is it better to donate to a charity or organization directly? Here's what we learned.

Those pennies and dollars add up to a large chunk of money. In 2020, checkout charity campaigns raised $605 million for various causes. Many of those donations were under a dollar—the spare change from rounding up the purchase price to the next dollar.

At face value, these fundraising campaigns look like a win-win-win proposal, since the store generates some goodwill for itself, customers aren't being solicited for large donations, and the charity or organization gets money.

But a 2021 study found that these kinds of fundraisers may not make customers happy. Instead, they appear to induce anxiety in customers when an employee asks about a donation, which then lowers the customer's evaluation of the service encounter.

There are other downsides to making donations at the cash register, says Laurie Styron, executive director of CharityWatch, a watchdog group that rates charities for their transparency and for how efficiently they use the donations they receive. In an email to Verywell, Styron noted there can be a considerable lag time between when the money is collected at the cash register and when it arrives at the charity. There may be administration fees taken out to cover the cost of collecting the donation.

"In the worst case, your donation may never make it to the charity at all," she said.

Being asked for a donation on the spot while running errands typically doesn't give customers enough time to evaluate what the charity is and whether they agree with its goals.

"Imagine you are in a hurry and pop into the store to buy some water and hand sanitizer, and there are three people waiting in line behind you," Styron said. "When the cashier prompts you to make a charitable donation, are you really going to set down all your things and grill the employee with questions about the nature of the contract between the company and the charity? Would the cashier even know the answers to your questions? Probably not."

According to Styron, it's better to donate directly to a charity rather than to donate at the checkout.

"Any time a donor puts a third party in between their donation and a charity, it increases the chances that their money could get diverted for some other purpose," she said. "If there is a cause you are passionate about supporting, navigate directly to the charity's website and make a donation."

Making direct donations on your own time gives you the opportunity to learn exactly how your contributions will be allocated. For example, an organization may be raising money for research or providing direct patient support.

While McCabe, the plaintiff in the CVS lawsuit, and other consumers who’ve caught wind of this story may feel perturbed or slighted by the store's fundraising tactics, ultimately, the suit will likely be dismissed.

Plus, the group intended to benefit—the American Diabetes Association—says it's still happy with how CVS is fulfilling its agreement.

"The American Diabetes Association is receiving the proceeds from the CVS pin-pad donation campaign as planned, and the support from CVS and its customers is helping our organization in its mission to prevent and cure diabetes and to improve the lives of everyone living with the disease," Chuck Henderson, CEO of the ADA, told Verywell via an emailed statement. "The ADA is not party to the lawsuit and there has been no allegation of wrongdoing by the ADA."

As for CVS? The company denies any wrongdoing, and plans to make up any difference between the amount raised and the $10 million pledge.

"The plaintiff's allegations that customer donations through our in-store fundraising campaign did not go to the American Diabetes Association are false and we have filed a motion to dismiss this complaint," CVS spokesperson Mike DeAngelis told Verywell via email. "Customers have—and continue to—donate to the ADA through participation in our in-store fundraising campaign. Our $10 million commitment ensures that the ADA will receive the full amount by the end of the three-year campaign."

The small amounts that customers donate when they are asked to give to a health charity at a store checkout can add up to a large amount of money. But there are downsides to making such donations, and it may be better to make donations directly to a health charity of your choice. If you need guidance, CharityWatch offers online resources for informed giving and lists of top-rated health charities.

Hepworth A, Lee NY, Zablah AR. Feeling anxious: The dark side of checkout charity solicitations. J Business Res. 2021;136:330-342. doi:0.1016/j.jbusres.2021.07.050

By Valerie DeBenedetteValerie DeBenedette has over 30 years' experience writing about health and medicine. She is the former managing editor of Drug Topics magazine.