'Not ethical': Woolworths 'checkout charity' sparks heated debate

Contrary to popular belief, asking customers for donations at the end of a shop at Woolworths and other stores can increase consumer anxiety, research shows.

A US study, co-authored by assistant professors of marketing Na Young Lee and Adam Hepworth of University of Dayton and Ohio University, revealed that about 40 per cent of customers had negative feelings associated with anxiety when asked to make a donation at checkout.

Point-of-sale donation, otherwise known as "checkout charity" solicitation, is a tactic becoming increasingly common, even in Australia.

While some people may not have an issue with this checkout interaction, the practice tends to put pressure on some shoppers who may feel annoyed due to feelings of guilt or being "trapped".

Onus on customers

Australian businessman William Fricker shared his thoughts on the matter, telling Yahoo News Australia that these situations tend to put the onus on consumers who may not be able to afford to donate.

"If people want donations, they should approach the federal government and the lotteries commission instead of putting the onus on people who may not be be able to afford to donate," Mr Fricker said in an interview, stating that lotteries donate hundreds of thousands of dollars to charities every year.

"Majority of people pay their taxes. All these institutions need to do is ring them up (lotteries) and make an application," Mr Fricker added, explaining that being asked to make a donation when they may already be financially stressed is just "not ethical".

Benefits of 'checkout charities'

For retailers, however, point-of-sale donations are a "win-win", according to Macquarie Business School marketing professor and consumer psychologist Jana Bowden.

"Point-of-sale donations are effective. They help organisations to meet their goals in terms of supporting brand purpose, supporting community and demonstrating corporate social responsibility," Professor Bowden told Yahoo News Australia.

"They allow brands to partner to amplify their impact on society. Point-of-sale donations processes are also easy to integrate into existing systems. The tech investment is relatively low, making the process easy to adopt and get onboard, and the impact in terms of dollars raised is high."

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For consumers, Prof. Bowden says the approach offers a simple way to donate as it is quite time-effective and people do not have to think about the process or find a way to make a donation.

"It's so simple that sometimes it actually might take more effort to find the button at checkout to not donate," she added, referring to automated point-of-sale donations at some checkout counters.

"Point-of-sale donations also of course pull at consumer heartstrings. On a checkout screen the cause is put in front of you, so it's top of mind and prioritised as you are paying. Consumers might even remember the charity after checkout, which provides the charity with longer term recognition, recall and awareness benefits," she said.

Then there's the downside

The downside, however, is that donating is still a cost that hits the consumer's hip pocket.

"Financial losses create perceived pain for consumers – and donating in that sense is no different to any other form of financial loss," Prof. Bowden explained. "Point-of-sale donations can create a sense of both emotional and cognitive dissonance in consumers – that sense of unease that consumers might feel when they are not sure if they are making the right decision or not."

"There is a sense of emotional dissonance in that a decision to click 'no' and not donate can trigger temporary feelings of guilt and remorse," she added, explaining that this can create a temporary sense of anxiety as consumers are pushed into an internal psychological battle as they rationalise their choice.

"Depending on the donation request, this can have negative flow-on effects to how the consumer feels about the brand experience, and therefore their intention to return," according to Prof. Bowden.

'Consumers feel pressured'

Prof. Bowden, however, explained that the way around this is for charities to "go small" in their donation requests instead.

"Flat donation requests, for example a retailer asking for $5 during checkout was found to induce more consumer perceived pain at checkout when compared to a smaller donation request in the form of a round-up to the nearest dollar," she explained further.

"This approach leads consumers to respond more favourably to the request and actually over the long-run results in consumers donating more to the charity via their repeat transactions.

"Many consumers feel pressured into donating at the checkout. They feel pushed into having to give. In other words, they feel bad doing good," Prof. Bowden added, and explained that past research found that up to 62 per cent of consumers oppose stores asking for donations at the checkout.

"Brands need to be careful not to leave consumers feeling annoyed when they leave the store. If that's the last thing they think and feel about the brand experience then the brand is doing itself damage – it's potentially creating a consumer who will take their shopping business elsewhere," Prof. Bowden advised.

"The reality is that a lot of consumers don't like to be asked overtly to donate money. They want to choose the causes they support on their own terms and on their own time."

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