Retailers tie holiday shopping to giving
Even though a lot of people are spending less this year, the holidays will go on and gifts will be bought. So retailers and charities are teaming up to make shopping itself a gift that gives more than once. Stacey Vanek-Smith reports.
A customer coming out of a Wal-Mart store in Anaheim, Calif., donates to the Salvation Army as a bell ringer watches. (David McNew/Getty Images)
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Kai Ryssdal: For all the talk of the holidays being a season of giving -- of making sure that those without at least have something -- in a way this time of year often does seem to be more about consumption, doesn't it? The crazed shopping and the incessant advertising. Even though a lot of people are spending less this year on everything, the holidays will go on. Gifts will be bought. So retailers and charities are teaming up to make shopping itself a gift that gives more than once. Marketplace's Stacey Vanek-Smith reports.
STACEY VANEK-SMITH: At a Best Buy in West Los Angeles, real-estate appraiser Dan FitzPatrick is buying gifts for his friend and his girlfriend, but he's not spreading his money around like he used to.
DAN FITZPATRICK: So, no, I'm definitely not spending as much money because I just don't have it.
A lot of people just don't have it this year and those that do are holding back. It's called shopper's guilt.
Behavioral Economist Robert H. Frank explains.
ROBERT H. FRANK: When there's so much in the news about families that are struggling to make ends meet, it's awkward to be seen consuming things that are not by any stretch considered necessities. People are a little embarrassed, I think, naturally.
So splurging on an Xbox for your kid or a cashmere scarf for your assistant can seem a little, well, unseemly at a time when millions of people are losing their jobs. But, if part of the price of that scarf goes to feed needy children? That feels a bit better.
Lynn Kahle is a consumer psychology expert at the University of Oregon.
LYNN KAHLE: Because of the fact that there's so much guilt out there now about over consumption, this might be a very good year to use cause-related marketing.
Very good indeed. Everywhere you shop these days it seems purchases are tied to good causes. More than a quarter of retailers, from Amazon to Avon, are giving part of their holidays receipts to charity.
Kahle says donating 10 or 20 percent of a purchase to charity is a good way to get people to spend. They feel like they're making the world a better place by shopping.
KAHLE: Ideally a retailer or a manufacturer using a guilt appeal would have purchasing the product the solution to reduce the guilt.
And shoppers don't actually have to do much of anything. Toys"R"Us will donate money to Toys for Tots if you just befriend Toys"R"Us on Facebook. Buy a gift card at Target and St. Jude's Children's Fund gets a boost.
MACY'S AD: Yes Virginia, there is a Santa Claus. Macy's Please!
With Macy's Believe campaign, feeling good is just a few pen strokes away.
MACY'S AD: Bring your letter to Santa into Macy's, and we'll donate to the Make A Wish Foundation.
Retailers have long worked with charities, but they're stepping up those efforts this year, and they're not being quiet about it.
KATHY SUTO: Well the good deeds wall is where we highlight some of their products.
Kathy Suto is the General Manager of Bloomingdales in Los Angeles. This year, if you buy one of a dozen different items, from an $18 teddy bear, to a $3,000 cappuccino maker, Bloomingdales will give a portion of the sale to charity. A giant mural detailing this program is in every Bloomingdales. And, Suto says, it's working.
SUTO: That gives the customer the idea of, oh, OK, well, something from that gift is going to go to a good cause. Those are typically the things we're out of first. So it's a good thing.
Back at Best Buy salesperson Jackie Martinez is explaining the store's "@15" program to shopper Dan Fitzpatrick.
JACKIE MARTINEZ: When you purchase this we actually donate a portion of the money to the organization called "@15," which is toys for teens.
FITZPATRICK: OK.
Buy one of the flagged items, like Dr. Dre headphones, or a DVD of "Bring it On," and a portion of the purchase goes to a teen charity. Fitzpatrick says he likes the idea of a donation being tied to a purchase instead of being asked to give money at the cash register.
FITZPATRICK: Being asked all the time, I feel guilty. It's like not giving money to the homeless guy every time you see him. So that's a good idea.
Martinez says customers are loving the program.
MARTINEZ: They're really happy, and they feel a lot better when they find this out and they also feel less guilty. It's just a warm feeling for them as well.
That warm fuzzy feeling and a new pair of Dr. Dre headphones? Yes, Virginia, there is a Santa Claus.
In Los Angeles, I'm Stacey Vanek-Smith for Marketplace.
Comments
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From Boston, MA, 12/03/2009
Including the intro to "Still D.R.E." at the end of the piece was absolutely fantastic. Made my night.
From Mesa, AZ, 12/03/2009
Yes, Mike Scott is technically correct about the tax deduction issue from the retailers' perspective. The bottom line for them is the same. What I should have said was, that if you give to charity separately on your own, you get the tax deduction, so paying $1 extra to a retailer costs you $1, but would cost you less if given directly to the charity, depending on your tax bracket. And I would be curious if this kind of scheme by retailers replaces any charitable giving on their part, or if there is any matching of customers donations. Do they give cash or do they give the equivalent value in merchandise (raises valuation issues)? In any case, the retailer gets the credit for the customers generosity. It doesn't smell right to me.
From Baltimore, MD, 12/02/2009
Kahle is clever or uninformed enough not to make a claim about how much is given: "Kahle says donating 10 or 20 percent of a purchase to charity is a good way to get people to spend." She is "a consumer psychology expert at the University of Oregon." I doubt she has any idea how much is given. She's only saying from a consumer's pov, how much would actually be an incentive.
But fwiw Barbara Socha is wrong in the other direction. Think about it, What actually happens is every penny they collect that they say will go to charity, actually does, and the only legal deduction is that same amount, amount which is not income to them, because they gave it away. Their taxes are the same as if they didn't collect the amount sent to charity in the first place. Many people have a very misguided notion of what a tax deduction is, both personal and for business. Rather than be fined and/or go to jail for tax fraud, all the business has to do is change to a lower percentage that is going to charity from now on, or if legal, just never say how much is.
From Baltimore, MD, 12/02/2009
A rather detailed story by Stacey Vanek-Smith but nowhere does she say what percentage of the price does anyone give to charity. Is it 3%, 1%, one thousandth of one percent?. The percentage makes all the difference. Did she ask the people she interviewed. Is she so naive? Instead, it was like a commercial for the companies she named. Disappointed.
From Mesa, AZ, 12/02/2009
Feeling better about shopping just because a portion of the purchase goes to charity is shallow. It's better to buy only what you need at the best price and give to charity separately. This way, you'll help save the planet by consuming less and you'll get the tax deduction, instead of the retailer. Think about it, for every extra dollar you pay a retailer for charity, they will get a tax deduction and keep part of that dollar!
From Akron, OH, 12/02/2009
HOW MUCH of my purchase goes to charity? The success of "cause-related marketing" might indicate the answer to be, "Who cares?"...as long as "a portion" of a retailer's proceeds is donated. But my guess is: if given the choice, most retailers will conclude that if shoppers feel equally compelled to buy at their stores whether they donate "10 to 20%" (the unrealistically high rate that Kahle claims), or some lesser amount, say, 0.1% of "qualifying purchases", they will quickly opt for the latter.
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