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Donating At The Checkout Counter, Where Does The Money Go?

SAN FRANCISCO (CBS 5) –- It's something that has happened to all of us shopping for groceries. Before you pay, you are asked to give, to one cause or another. So where is the money going, and how do people feel about it?

There's actually a word for it: Embedded giving. It raises millions for charity. But is it something you want to be asked every time you shop? Shoppers we talked to had mixed opinions: "It doesn't bother me because it's for a good cause," said Shelly Lewis. "Sometimes it puts me a little bit off, kind of feels like maybe I am not doing enough of my part," said Bob Kunich.

"They feel sometimes badgered into giving, guilted into giving, manipulated into giving," said Golden Gate University marketing professor Kit Yarrow. Part of her job involves keeping tabs on shoppers' preferences. Yarrow said right now, "Consumers feel like they are just bombarded."

She said embedded giving is a marketing ploy that may be getting over-used. "It's backfiring. It doesn't seem like it's special or significant," she said.

And despite reassurances from cashiers that 100 percent of the money goes to the cause, CBS 5 found many shoppers remain skeptical.

"I usually choose not to donate, because I have no idea where the money is going," said Bob Smith. "I wonder the percentage that the store gets," said Tammy Keller.

The California Attorney General's Office told CBS 5 there Is very little regulation of embedded giving. Safeway wouldn't talk to us on camera about it, saying "it's a touchy subject."

But the company did send CBS 5 financial statements that support its claim that all the money raised at the cash register does go to causes, such as UCSF's breast cancer research program.

"I think Safeway is going to make an enormous impact on breast cancer," said Dr. Laura Esserman, Director of the Breast Care Center at the UCSF Comprehensive Cancer Center. "They have made a strategic decision to invest it in really high impact programs so that they can make a big difference, and that is what they are doing."

Safeway is not the only one with such donation drives. Whole Foods Market and Petco are among the many companies that collect donations at the checkout counter. At Petco, donations all go through the Petco Foundation, which keeps less than 10 percent for administrative overhead. The rest helps thousands of local animal groups like Gimme Shelter, which rescues abandoned cats.

"We have great success with our customers. They are open hearted, they want to give, they want to help animals in the community," said Lori Morton Feazell, Petco's Director of Animal Care and Education.

But Yarrow said as more companies jump on the charity bandwagon, "it loses its impact. It becomes sort of meaningless."

The bottom line for shoppers might be one cashier's advice: "If you don't feel comfortable don't do it," the cashier said.

Safeway released this statement to CBS 5 about their checkout donation program:

We hold four retail checkstand fundraisers a year. During April we raise funds for "people with disabilities" and distribute the funds to a range of organizations including Easter Seals and Special Olympics. In June and October we raise funds for prostate and breast cancer because these two cancers affect the broadest cross-section of our customer base. The funds are donated to cancer research projects at some of the top cancer centers in North America. In August, we raise funds to assist people with neuromuscular disease.

Last year Safeway raised $53 million for these four causes. All of the funds went directly to the designated charity. Regarding transparency, we make it clear to customers through a range of channels how the funds are distributed through press events and press releases as well as messaging to both customers and employees. The Safeway Foundation files an annual Federal Form 990 that provides detail and complete transparency on how the funds are allocated.

Regarding customer reaction, these campaigns are well-received by customers. We track customer comments and the percent of positive feedback dwarfs the negative. The fact that last year we raised $18 million for breast cancer during four weeks in October tells us the vast majority of our customers view the campaign positively. The feedback we get is that our customers appreciate the opportunity to make a small contribution to what they see as an important and worthwhile cause. In fact, the majority of donations are in one dollar denominations. In today's difficult economic times, every dollar is needed to fund important services and research, which is why Safeway dedicates its time and efforts to help those in need.

(© CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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