Judge rules Value Village guilty of deceptive marketing practices

Value Village isn’t a charity but is a for-profit business with annual revenue of $1B

A King County Superior Court judge ruled in November 2019 that Value Village used deceptive advertising by leading customers to believe they were a charity or a nonprofit.

Superior Court Judge Roger Rogoff ruled in November 2019 that from 2009 to 2019, Value Village deceived its customers, citing an “overwhelming” barrage of advertising, signs, brochures and in-store announcements.

Superior Court Judge Roger Rogoff ruled that from 2009 to 2019, Value Village deceived its customers, citing an “overwhelming” barrage of advertising, signs, brochures and in-store announcements. Click To Tweet

Judge Rogoff scolded the for-profit Value Village thrift store chain for creating a “deceptive net impression” that shoppers making purchases at Value Village were helping charity.

“The consuming public was deceived,” said Superior Court Judge Rogoff in his hour-and-half verbal ruling in front of a packed courtroom.

The judge found that Value Village knew its advertising could deceive consumers based on marketing studies it commissioned into thinking it benefited charities.

No portion of any purchases owned by Value Village’s parent company, TVI Inc., has ever benefited charities, a press release from the Attorney General office stated.

Washington Attorney General Bob Ferguson launched the consumer protection lawsuit against Value Village in 2017.

“Value Village made millions by deceiving consumers and donors,” said Ferguson.

Value Village made millions by deceiving consumers and donors. – Washington Attorney General Bob Ferguson Click To Tweet

The lawsuit arose from Value Village’s business practice of paying non-profits and charities an agreed rate for public donations it received when soliciting for money using their names and logos. This is separate from the sale of goods which incur no charitable payment.

Value Village marketing confused consumers because they imply that all purchases benefit charities, including in-store ads which read: “Your donations and purchases help us fund (nonprofits’) programs and services. How’s that for shopping with a smile?”

The 37-page court document filed in 2017 alleged deceptions mainly involve misleading consumers and donors to believe that all types of donations and purchases benefitted charity, and creating the impression that Value Village itself is a non-profit or charity.

In fact, no portion of Value Village in-store sales benefits its charity partners, and contrary to Value Village’s marketing, for years, some types of donations — including furniture and housewares — did not benefit charities at all.

Others provided far less benefit than consumers were led to believe, or did not go to the charity indicated to donors. In many cases, the donations were, in reality, pooled and shared among multiple charities.

Value Village, a second-hand chain is a for-profit business with annual revenue of $1 billion. It has 330 stores in the United States, Canada, and Australia.

In addition, Value Village’s advertising gave consumers the impression that it was a nonprofit organization. For example, advertisements in-store and online claimed shopping or donating at the stores would “help your neighbors,” constitute “good deeds” and support Value Village’s “philanthropic efforts” in developing nations.

The profit-driven retailer is now liable for unspecified damages imposed by the attorney general of Washington.

Judge Rogoff will determine the amount of penalties Value Village will face for doing so at a separate hearing, expected sometime next spring.

Value Village maintains they never misled consumers. They are expected to appeal the verdict.

It is not known yet how this impacts Canadian Value Village stores.

Thrift and second-hand stores benefit from clothing donations. According to a study done by Kijiji, 85 per cent of Canadians interacted with the second-hand industry by either donating, trading, purchasing or selling clothing in 2016, and 62 per cent of second-hand goods came from donations.

-george@albertapressleader.ca

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