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May 22, 2015

Minn. Sues Thrift-Store Chain Savers Over Charity Pitch

Minnesota's top legal official filed suit Thursday against international secondhand retailer Savers, alleging the thrift-store firm is misleading shoppers about how much of the proceeds from donated goods goes to charity, the Minneapolis Star Tribune reports. The suit comes six months after state Attorney General Lori Swanson issued a scathing report that accused Savers and its partner nonprofits of mishandling donations.

The for-profit company, which operates 15 stores in Minnesota and 330 worldwide under various names, sells contributed clothes and other items on behalf of partner groups and provides donors a receipt for tax-deduction purposes. Ms. Swanson said only a small fraction of the sales revenue goes to the charities and that stores commingle donated items, making it difficult to determine if proceeds from their sale go to the intended nonprofit.

Ken Alterman, president and CEO of the Bellevue, Wash.-based retailer, said it has been changing its practices in response to Ms. Swanson's concerns. "Rather than allow these changes to take place and then evaluate their effect, the AG's office has decided to file this lawsuit and put more than 25 years of positive community impact and millions of dollars in annual charitable funding at risk," he said.