Aziz Hashim Professor of Franchise Entrepreneurship
Cecil B. Day School of Hospitality Administration
Robinson College of Business
Georgia State University
Checkout charity, a phenomenon whereby cashiers or self-service technologies solicit charitable donations from customers during the payment process, is quickly becoming an established aspect of many retail and service experiences, including restaurants. It is a controversial practice, because many managers believe it is detrimental to the frontline service experience and thus hurts sales. But the growing prevalence of checkout charity suggests corporate offices feel otherwise – or perhaps many simply believe the corporate social responsibility benefits outweigh the costs.
Benjamin Lawrence of Georgia State University’s Robinson College of Business and colleagues conducted a study of the impact of checkout charity on restaurant performance and customers. The team used data from one restaurant field study, three scenario-based experiments, and actual sales and checkout charity rates provided by a national restaurant franchise chain with approximately 1,000 US locations.
Lawrence and his colleagues found that when customers donate, they experience a “warm glow,” and this encourages return patronage of the store. This finding may be counterintuitive for managers who often infer, quite correctly, that many consumers do not like being asked to donate. However, the “warm glow” is perfectly consistent with other research on “licensing,” a term used in psychology and marketing to describe how good behavior can be followed by indulgence.
The team’s analysis of the national store-level sales data found that checkout fundraising, as a percentage of sales, predicts store revenue – a finding consistent with results of both their field study and scenario-based experiments. Research into the increasingly prevalent phenomena of checkout charity is only beginning. However, the results of these studies at least suggest that checkout charity campaigns can help raise funds for corporate social responsibility initiatives while potentially increasing sales at no cost to customer satisfaction.
For more information
Giebelhausen, M., Lawrence, B., Chun, H., & Hsu, L. (2017). The warm glow of restaurant checkout charity. Cornell Hospitality Quarterly, doi: 10.1177/1938965517704533.