The Co-operative Group has handed over profit from food vouchers used by asylum seekers in its stores to refugee charities.
It donated £20,000 this week as the government scrapped its controversial refugee voucher system.
Some £17,000 has gone to London refugee charity the Refugee Council and a further £3,000 to refugee organisations in Scotland and Northern Ireland.
Asylum seekers redeemed a total of £400,000 worth of vouchers in stores.
A Co-op spokesman said: "As a convenience retailer it was important to provide a service to asylum seekers by accepting their vouchers, but we never liked the system."
Refugee Council head of advocacy Jessica Yudilevich said: "We applaud the Co-op's refusal to profit from the voucher scheme and strongly urge other supermarkets to follow suit. If other supermarkets also return the profit made then the gesture would act as the final nail in the coffin of this much hated system of support."
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