Consumer alert: Don’t fall for the holiday hustle

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

MEMPHIS, Tenn. -- Decorations are out and bells are ringing.  This holiday spirit also means it's the season of giving.

"Most of us at the holiday season want to be generous, it's a feel good kind of thing," Nancy Crawford of the MidSouth Better Business Bureau said.

However, it's important for consumers to be careful not to fall for the holiday hustle.

Crawford said, "The main thing you need to consider is to give with your head and not with your heart."

Advocates say a charity should use 65 cents for every dollar collected on its actual mission, so watch out for non-profits that spend too much on professional solicitors and salaries.

While all of those are important indicators, new research shows taxpayers could be wasting time if they only look at a charity's finances.

"It's not enough. It's like looking at a business and knowing who the owner is, but not knowing how long they've been in business," Crawford said.

Crawford says the key is to check a charity's track record.

Websites like the BBB Wise Giving Alliance, GuideStar, and Charity Navigator can help. The Secretary of State's office is also a good start.

Research a charity in Tennessee

Mississippi even issues an annual report that does the math for you. It reveals the percentage each non-profit actually spends on charitable purposes and things like fundraising, and includes disciplinary actions.

Looking at a charity's disciplinary history is another critical step in researching a charity.

"There have been occasions where I've been solicited by people who weren't legitimate," area resident Bruce Aiken said.

The On Your Side Investigators obtained a report from the Tennessee Secretary of State's Office about charities hit with fines. Most were for simply failing to renew or not registering.

However, a Nashville-based charity, 26.4.26, got in trouble for deceptive solicitations after it collected donations for the Newtown shooting, but the founder went on a spending spree himself.

In Memphis, Chilcutt's Martial Arts, was cited for conducting a sales promotion without prior consent from the charity. It was supposedly collecting money for St. Jude. The owner told WREG it was a simple mix-up about money he gave to St. Jude and use of a logo.

Finally, when deciding which charity to donate to, be on the lookout for groups playing the name game.

Crawford sayssaid"You have to be careful of sound a like charities, that sound like a legitimate, national organization we are all familiar with, but that might not be exactly who you think they are."

"Ask where the office is, ask what their phone number is, can you speak to someone else," Miranda Harbor who works for Make-A-Wish of the MidSouth said.

Harbor added while she's learned those things on the job, she uses the same guidelines to decide where her personal dollars go.

"If they can't answer those questions, then they're probably not going to receive my contribution," she said.

It's also important to keep in mind that a legitimate charity will want your money just as much tomorrow as it does today, so don't fall high pressure pitches.

In addition, watch out for the guilt trip, which comes in different forms.

Research shows some non-profits doubled their rate of return when they sent potential donors a mailer that included a freebie. It seems consumers then felt compelled to send money after accepting something free of charge.