Right Intent – Wrong Way to Achieve It

It was announced this week in the UK that French bakery group Paul and sandwich chain Pret a Manger will begin offering discounts to customers who bring their own re-usable coffee cups.

It appears they were yielding to pressure from environmental groups concerned about the mountains of waste generated in the UK each year. Britain’s coffee addiction is creating an estimated 25,000 tons of waste with 2.5 billion disposable coffee cups used in the UK each year.

What makes it even more of an issue is that most of the cups used by major coffee chains are not recyclable due to the polyethylene used in their production, a material that cannot be separated out in the standard recycling process.

To reduce the number of re-usable cups being used Paul will now be offering customers a 10p discount for every re-usable cup, while Pret a Manger, is offering a 25p discount. Both companies will also be offering re-usable cups for purchase in their stores.

So, both Paul and Pret a Manger, for whatever reason, are trying to reduce the number of disposable coffee cups their customers are using. A worthy objective. They are trying to achieve this by offering a discount to customers who use re-useable cups. There’s just one problem – it won’t work.

A recent study from Cardiff University found that while a charge on disposable cups increased the use of re-usable coffee cups, a discount on re-usable coffee cups had no impact on their usage.

So, charging people drives them to towards re-usable cups. Giving them a discount does nothing to reduce the use of disposable cups. What’s that about?

Study author Professor Wouter Poortinga said:

There is an important nuance when it comes to financial incentives, People are far more sensitive to losses than to gains when making decisions – so if we really want to change a customer’s behaviour then a charge on a disposable cup is more likely to be effective.

The study estimated that charging coffee drinkers 25p for every disposable cup they use could cut the number thrown away in the UK by up to 300 million every year.

Therefore, if you have ever wondered whether its better to offer a discount to someone to perform a new behaviour (e.g. use their own re-usable shopping bags at the Supermarket, bring their own reusable cups to the coffee shop, have a car full of passengers on a busy motorway commute) or charge them for the existing behaviour (e.g use plastic shopping bags, use disposable coffee cups, travel by themselves in a car), the answer is very, very clear. Charge them for the existing behaviour.

 

One thought on “Right Intent – Wrong Way to Achieve It

  1. Matters of Living says:

    funny how people can be influenced. financially the result may be the same but an extra cost vs a discount are represented so differently in our minds. I read about a similar idea for magazine sales. they list less viable subscription options to make other ones look comparatively more enticing and increase subscriptions that look like a great deal without an actual discount

    Like

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