WEBVTT - How Does Checkout Charity Work?

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<v Speaker 1>Welcome to brain Stuff, a production of iHeart Radio, Hey

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<v Speaker 1>brain Stuff, Lauren Boba Bom Here. You've seen it at

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<v Speaker 1>your local supermarket, department store, or even on your rideshare app.

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<v Speaker 1>You're asked verbally or digitally if you'd like to round

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<v Speaker 1>up your purchase to the nearest dollar, with the difference

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<v Speaker 1>going to a charity. It may not seem like much

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<v Speaker 1>to hand over an extra sixty three cents, so you

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<v Speaker 1>say yes. But how much do these charities collect and

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<v Speaker 1>is it worth it? Check Out charity, as it's called,

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<v Speaker 1>isn't just about community service and warm fuzzies. It's a

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<v Speaker 1>big business engage for good and organization devoted to corporate

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<v Speaker 1>social initiatives found that in seventy six point of sale

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<v Speaker 1>fundraising campaigns raised more than six five million dollars in

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<v Speaker 1>the United States. Each of these campaigns raised at least

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<v Speaker 1>a million bucks. A viral TikTok video claimed that stores

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<v Speaker 1>can right off these checkout donations from customers on their

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<v Speaker 1>own end of your taxes, but that's simply not true.

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<v Speaker 1>These donations don't count as company income, so they can't

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<v Speaker 1>be written off. When a store donates from its own

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<v Speaker 1>business income, the company can write that off as a

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<v Speaker 1>charitable donation. Customers who donate to these checkout charities could

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<v Speaker 1>also write off their contributions on their taxes, but most

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<v Speaker 1>people don't as the amounts are so small. For the article,

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<v Speaker 1>this episode is based on How Stuff Work spoke with

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<v Speaker 1>Joe Waters, a consultant in what's called cause marketing, which

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<v Speaker 1>his blog Selfish Giving defines as a partnership between a

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<v Speaker 1>nonprofit and for profit for mutual profit. Waters said, what

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<v Speaker 1>companies are hoping for out of checkout charity is that

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<v Speaker 1>there's a halo effect and the consumers are going to

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<v Speaker 1>spend more with them because they view the company more

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<v Speaker 1>favorably and the tactics seems to be working. Of respondence

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<v Speaker 1>to a survey said that they felt positive about a

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<v Speaker 1>company after being asked to donate at the register. How

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<v Speaker 1>stuff Works also spoke with Michael Giebelhausen, a marketing professor

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<v Speaker 1>at Cornell University. In He and a team published a

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<v Speaker 1>study that looked at revenue at a national chain restaurant

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<v Speaker 1>following the implementation of a checkout charity campaign. They found

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<v Speaker 1>it had a statistically significant positive impact on sales. This

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<v Speaker 1>economic effect is something marketers call a warm glow. Everybody

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<v Speaker 1>wants to see themselves in a positive light, and when

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<v Speaker 1>companies give consumers the chance to engage in pro social

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<v Speaker 1>behavior like reusing their towels at a hotel to save

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<v Speaker 1>water or packing up groceries in an environmentally friendly reusable bag,

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<v Speaker 1>consumers walk away feeling good about themselves in psychological terms.

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<v Speaker 1>By donating to a checkout charity or reusing a hotel towel,

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<v Speaker 1>the consumer has earned moral credit. And once you've earned

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<v Speaker 1>a little moral credit, you have license to do something

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<v Speaker 1>that's not as virtuous, like spending money on something frivolate,

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<v Speaker 1>sorb unhealthy. Giebelhausen said, if your business is a vice

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<v Speaker 1>business like fast food or candy, and it's a particularly

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<v Speaker 1>good combination, customers who donate feel good about you, and

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<v Speaker 1>then they have these moral credits that they can spend

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<v Speaker 1>on your products. Rounding up can even beat asking for

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<v Speaker 1>a straight donation. For nineteen days, and researchers from North

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<v Speaker 1>Carolina State collaborated with a local zoo. The zoo employees

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<v Speaker 1>asked patrons of its on site cafe if they'd like

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<v Speaker 1>to round up their purchases to the nearest dollar for charity,

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<v Speaker 1>and the results were compared to the campaign that the

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<v Speaker 1>zoo normally ran, which asked patrons to donate an extra

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<v Speaker 1>dollar at the cafe. The study found that of patrons

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<v Speaker 1>agreed to round up, compared to only eighteen percent who

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<v Speaker 1>usually gave a dollar. The zoo also raised more money

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<v Speaker 1>during that nineteen day period. Check Out charity campaigns are

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<v Speaker 1>not without their pitfalls, though. The Waters mentioned a local

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<v Speaker 1>Austin grocery store chain that hit him up for a

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<v Speaker 1>different charity every time he came to the register. The

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<v Speaker 1>store employees didn't engage customers or bothered to explain what

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<v Speaker 1>the charity was all about. An option just popped up

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<v Speaker 1>on the credit card PINpad, and Waters felt pressured to donate,

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<v Speaker 1>he said, of those are the programs that people complain about. Indeed,

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<v Speaker 1>a study published in October two found that checkout charity

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<v Speaker 1>could increase a shopper's anxiety, with respondents using words like pressured, annoyed,

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<v Speaker 1>and concerned about being judged to express how they felt

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<v Speaker 1>about being asked only used positive words to express their feelings.

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<v Speaker 1>The researchers found that the anxiety quote can be relieved

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<v Speaker 1>when customers agree to donate, but only when the solicitation

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<v Speaker 1>comes from a cashier as opposed to an automated request

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<v Speaker 1>made by a computer or self service checkout machine. In

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<v Speaker 1>Waters experience, the checkout charity campaigns that work are thoughtfully

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<v Speaker 1>executed and integrated with the company these mission and client base.

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<v Speaker 1>For example, in outdoor retailer Patagonia donated a hundred percent

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<v Speaker 1>of their Black Friday sales toward environmental groups and raised

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<v Speaker 1>ten million bucks, which is five times more than they

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<v Speaker 1>were expecting. Waters also pointed to the Month of Giving

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<v Speaker 1>campaign at the sandwich chain Jersey mis during the month

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<v Speaker 1>of March and only during the month of March, each

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<v Speaker 1>franchise location partners with a local charity and solicits donations.

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<v Speaker 1>The campaign is capped by the day of Giving, when

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<v Speaker 1>the prose feeds from all sales made on March twenty

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<v Speaker 1>eight are given to the chosen charity. Today's episode is

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<v Speaker 1>based on the article checkout charity works if It's done

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<v Speaker 1>right on House to works dot com, written by Dave Ruse.

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<v Speaker 1>Brain Stuff. This production of I Heart Radio in partnership

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<v Speaker 1>with how stuff Works dot Com and it's produced by

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<v Speaker 1>Tyler Klang. Four more podcasts from my heart Radio. Visit

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<v Speaker 1>the heart radio app Apple podcasts, or wherever you listen

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<v Speaker 1>to your favorite shows.