Is it permissible to take money marked "Zakat" from a merchant, even if one does not need it, and dispose of it on his behalf, or must it be returned to him?

If you know that the money given to you is zakat, and you are not one of its rightful recipients, then you must return it to its owner. It is not permissible for you to take it for yourself or dispose of it. Rather, you should inform him that you are not eligible for zakat and return it to him.

If the owner wishes to make it a charity for you, he may do so, for charity is permissible for the wealthy, though abstaining from it is better.