Are you really that surprised? Did you think that most companies will easily shell $50k if they have a way out?

We read before about Nick and Nate Smith’s incredible story. 11-year-old Nick Smith sunk the puck into an almost-impossible shot — a three-and-a-half-inch cutout — to win the $50,000 grand prize. Unfortunately, there was a small catch since his brother Nate Smith was the true ticket holder. So, in an incredible show of honesty, Pat Smith, the boys’s father called up the next day and revealed the mix-up.

Unfortunately for the Smiths, this was the loophole that the company needed.

On Wednesday, the company decided AGAINST giving the boys their deserved win — the $50,000 prize. Instead, they announced that they will donate a smaller amount, $20,000 to Minnesota youth hockey in honor of the boys (charitable tax break, anyone?)

Odds on Promotion President Mark Gilmartin issued a carefully prepared statement. “We greatly respect the eventual honesty of the Smith family,” he said. “Although we’re unable to the pay the claim on Nate’s incredible shot, we are confident our donation will help foster a positive environment for present and future youth hockey in Minnesota.”

The boy’s father, Pat Smith told AP that the boys are disappointed that they lost out on money for their college fund, but they’re happy about the charitable donation. Due to their honesty, the Shattuck-St. Mary’s hockey school has decided to award the boys with scholarships to their hockey school.

Personally, I think that the insurance company should have awarded the boys with the prize. From an ethical standpoint, the boys deserved the win (one person took the shot; the puck went in.). Also, the show of honesty, especially in this tough economy, is a rare commodity that in itself should be rewarded. At the same time, from a purely business standpoint, the story received press coverage nationwide; this would have been a great opportunity for the company to really show their commitment to the community and to the values (integrity being one) that they stand for.

See the Smiths story here.