A King County Superior Court judge ruled Friday that TVI, Inc., which owns the for-profit Value Village thrift store chain, misled consumers about the extent of its charitable contributions, specifically citing past practices by Spokane store locations concerning donations to the Rypien Foundation.
“Value Village profited by misleading Washingtonians into believing that it was a nonprofit,” Washington state Attorney General Bob Ferguson said. “My office received numerous complaints from consumers who feel deceived by Value Village’s advertising.”
Judge Roger Rugoff said the Spokane-area stores led the public to believe that a portion of each sale went toward the Rypien Foundation, when in fact the stores paid the foundation a flat fee per month to use its name.
The judge ruled that Value Village violated the state’s Consumer Protection Act because the company knew or should have known that consumers could perceive it was a charity or nonprofit.
Rugoff will determine the penalties the company will face at a later ruling, expected this spring.
The Spokane location’s agreement with the Rypien Foundation began in February 2014 and ended Jan. 31, 2015, according to the complaint. The stores were allowed to use the foundation’s logo on “store signage, attended donation stations, donation bins, donation receipts, and various print media advertisements.”
Ferguson filed the 37-page complaint in December 2017.
Of seven claims made in the lawsuit, Rugoff found three were proven. The other four were defeated.
Of the claims that were succesful, one concerned the Rypien Foundation’s relationship with Value Village.
Rogoff found that the company misled customers about how their donations would be given to the foundation. While customers were led to believe their donations would go to the Rypien Foundation, the foundation actually received a consistent $4,000 a month, regardless of the amount customers donated to the foundation, the complaint said.
Brian Clearman, Value Village’s regional supply chain manager, confirmed this during a deposition.
He was asked, “If the on-site donations at one of the (Spokane) stores doubled from what it had been historically, the Rypien Foundation would still only receive $4,000; correct?”
Clearman responded, “Correct.”
The Rypien Foundation – started by former NFL star Mark Rypien – provides assistance to families battling cancer in the Inland Northwest. The foundation is not a target of the lawsuit but did have knowledge of the contract.
The complaint notes that the foundation’s own website had misleading information about its partnership with Value Village.
“When you donate and recycle your unneeded items, they will be made available at affordable prices at local Savers stores, and a percentage of the revenue will be donated to the Rypien Foundation,” the website stated, according to the complaint.
The Rypien Foundation’s website was not active at the time this story was posted.
Officials from the Rypien Foundation did not immediately respond to request for comment.
Rich Medway, Value Village general counsel and chief compliance officer, said he could not comment on the Rypien case until reviewing the judge’s written ruling.
In the two other successful claims, thecompany was found to be misrepresenting purchases as benefiting charity and having advertising that could lead consumers to believe that the company was a nonprofit or charity.
Medway noted in a statement that the company won a majority of the claims made by the attorney general’s office.
The company defeated a claim about how the company pays charities for their clothing and goods donations. When the Attorney General’s office began the investigation, Value Village paid an amount per pound for cloth goods, but did not pay out for “hard goods” such as furniture. During the course of the investigation, Value Village began paying for these goods.
TVI also defeated claims regarding The Moyer Foundation, a charity that provides assistance to families affected by grief and addiction, which was founded by former Seattle Mariners pitcher Jamie Moyer, as well as a claim regarding TVI registering as a commercial fundraiser in 2015 and not making a required in-store disclosure in a timely manner.
TVI also defeated the Attorney General office’s claim that they were deceptive when displaying signage indicating the donations benefited a specific charity when in fact the donations benefited a variety of charities.
Medway also pointed out a comment from the judge commending the company’s business model.
“There is nothing wrong with TVI’s business model, in fact, I would say that we should have more corporate community members who reuse unusable, unsellable items; who look for ways to properly get rid of the stuff they can’t sell; who work with charities and nonprofits, who do the kind of business that they do,” Rugoff said.
Subscribe to the Coronavirus newsletter
Get the day’s latest Coronavirus news delivered to your inbox by subscribing to our newsletter.