The impact of price promotions on checkout donations
| Published date | 20 November 2017 |
| DOI | https://doi.org/10.1108/JPBM-11-2016-1359 |
| Pages | 734-749 |
| Date | 20 November 2017 |
| Author | Lan Xia,Nada Nasr Bechwati |
| Subject Matter | Marketing,Product management,Brand management/equity |
The impact of price promotions on checkout
donations
Lan Xia and Nada Nasr Bechwati
Department of Marketing, Bentley University, Waltham, Massachusetts, USA
Abstract
Purpose –This paper aims to present a model linking price promotions to checkout donations. It is argued that price promotions evoke two
perceptions/emotions, namely, feelings of gratitude and perceived sacrifice of purchase, which consequently, influence the likelihood to donate.
Feelings of gratitude dominate when the discount is high, while feelings of sacrifice dominate when the discount is low. Compared to no-d iscount
situations, high discounts enhance consumers’intention to donate while low discounts reduce this intention.
Design/methodology/approach –A total of four studies using shopping scenarios are conducted. Study 1 examines the main effect and the
mediating factors. Study 2 replicates the findings in different product categories and at different unit-price levels. Studies 3 and 4 test the
moderating effects of customer effort and discount framing.
Findings –Findings of the four studies provide support for the proposed model. Compared to no-discount situations, high discounts enhance
consumers’intention to donate, while low discounts reduce this intention. The effects are mediated by feelings of gratitude and sacrifice and
moderated by effort obtaining the discount and format of the discount.
Research limitations/implications –Theoretically, this research advances the understanding of consumers’interpretations of price promotions. All
studies are conducted in an online context.
Practical implications –This research informs retailers and charity institutions on the best timing for soliciting checkout donations and indicates
specific tactics to enhance consumers’donations.
Originality/value –This is the first study linking price discounts to the growing phenomenon of checkout donations. The research is different from
cause marketing where the donation is included in the price of a specific product. The work also differs from studies examining the spillover effect
where additional purchases benefit the consumers instead of a cause.
Keywords Pricing, Price promotions, Gratitude, Checkout donations, Perceived sacrifice
Paper type Research paper
Imagine that you are shopping online and, as you are checking
out by completing your payment information, you see the
following prompt right below the payment amount: “Would
you like to donate $1 to supportXYZ cause?”Would you check
the yes box? We frequently hear such requests at store
checkouts. Increasingly, such requests are also made online.
More than $354m were raised by big corporations in 2012
through such donations, onlineand offline (Johnsen, 2013). In
2014, a study by Cause Marketing Forum (2015) showed that
$390m was raised by a group of 77 million dollar plus
companies. On the list of “Top Three”, eBay ranked the first
($62.2m). Several software products and apps have been
developed to make checkout donations easy to implement by
retailers (e.g. checkout donations by Shopify); some of these
products even help match businesses with charities. Online
checkout donations do not add substantial cost to retailers, as
they are technically easier to implement and do not require
employee training. Moreover, such donations lead to the
collection of significantamounts of money for the charity.
While making a donation at checkout is a good deed,
consumers do not always agree to participate. In fact, a review
of related news articles online and of blogposts reveals that the
general public tends to hold negative attitudes toward the
practice (Hessekiel,2015;Xia and Bechwati, 2014).
Compared to other forms of charity donations, checkout
donations are unique in many ways. First, customers might
consider a checkout donationas part of a shopping episode, i.e.
the donation is seen as embedded in their purchases. The fact
that consumers havetheir wallet open while the request is made
facilitates the integration of the charity donation decision with
the purchase. Second, checkout donations are typically
presented by the retailer with a direct request (both online and
offline) with a shorttime for shoppers to decide. Consumers are
eager to complete the transaction and move on. Third, these
donations usuallyinvolve only a small amount of money. Given
these characteristics, consumers are not expected to base their
decision to donate or not on careful examination of charity-
related factors. Instead, contextual factors, especially those
arising from the purchase process, are expected to greatly
influence customers’behavior because the two actions of
purchasing and donating at checkout are integrated as one.
Among these contextual factors is price promotion which we
study in this paper. In our empirical studies, we focus on
The current issue and full text archive of this journal is available on
Emerald Insight at: www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
26/7 (2017) 734–749
© Emerald Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/JPBM-11-2016-1359]
Received 13 November 2016
Revised 28 February 2017
Accepted 18 March 2017
734
checkout donations online; the online context is void of social
factors such as interactionwith store employees and presence of
other consumers.
The purpose of this research is to examine the impact of
price promotions on consumers’likelihood to participate in
online retailer-sponsored checkout donations. We draw on
research in behavioral pricing, particularly that focusing on
perceptions of price promotions, to link price discounts to
consumers’willingness to donate at checkouts. We
hypothesize that different discount levels on product
purchases will influence consumers’intention to donate at
the checkout differently. We argue that high discount levels
result in higher likelihood to donate at checkout than no
price promotions do. More interestingly, we argue that low
levels of price discounts lead to lower likelihood to donate at
checkout than no price discounts do.
Our research contributes to researchin pricing and in charity
giving in many ways. While recent research has examined the
effect of type of product purchased or referenced on intention
to donate (Savary et al.,2015;Zemack-Rugar et al., 2016)or
purchase intentions when the cause (hence donation) is
embedded in the product (Andrews et al.,2014), to our
knowledge, no one has linked price discounts to checkout
donations. Andrews et al. (2014)examined the impact of cause
marketing on purchases with price discount as a moderating
factor. Our research studies the main effect of price discount
and its subsequent effect on consumers’likelihood of donation
at checkout. Our work is also different from studies examining
the spillover effect where discounts could result in more
spending in a store. Additional purchases do not necessarily
have, and most likely do not have, the same dynamics as
donations because all these purchases are benefiting the
consumers, while the context of checkout donations, as we
study it, involves botha purchase for the self and a contribution
to a cause. Finally, the growing phenomenon of checkout
donations has received little research attention. Studying this
phenomenon and how it is influenced by a contextual factor,
such as level of price discount offered, might have interesting
managerial implications.
The main contribution of this research is the attempt to
theoretically investigate, in detail, and to empirically test the
relationship between price promotions and checkout
donations. Price promotion and its effects have been studied
intensively in the pricing literature. In this paper, we apply
relevant knowledgedeveloped in the pricing field to understand
the possible impact of price promotion on checkout donations.
The application to the case of checkout donations is new and
timely.
Literature review
Good deeds: charity donations
The research on why peoplegive or donate has been abundant.
Several researchers drew ona variety of theories and models to
explain giving behavior. The theories/models used include the
social identity theory (Mael and Ashforth, 1992;Winterich
et al.,2012), the social exchange theory (Mount, 1996) and the
underlying equity theory (Weerts and Ronca, 2008) and the
expectancy theory (Weerts et al.,2010). The social identity
theory states that, in addition to personal identity, the self-
concept is also composed of a social identity where individuals
perceive themselves as belonging to particular groups (Tjafel
and Turner, 1985). Donations are made to such groups to
support or to construct the donor’s social identity (Winterich
et al., 2012). Researchers also draw on the signaling theory, an
offshoot of the social identity theory, to argue that people
donate to signal to self and to others (Glazer and Konrad,
1996). The social exchange theorystates that relationships are
thought about in economic terms, where partners view
relationships as “give and take”(Chadwick-Jones, 1976).
Accordingly, donors give expecting to receive something in
return, such as social recognition. Social norms also factor in
the social exchange theory; people donate to socially
reciprocate with entities that had already given them (Mount,
1996). The expectancy theory views motivation as the force
making a person perform a particular action; motivation is
mainly a function of the perceived efficacy of one’s actions
(Vroom, 1964,Lawler and Suttle, 1973). According to the
expectancy model, people donate when they feel that they can
make a difference through their contributions (Weerts and
Ronca, 2008).
Research on giving and philanthropy has examined
contextual factors explaining donating behavior. While many
researchers have focused on understandingunderlying theories
and the related enduring factors enticinggiving behavior, other
researchers have studied the context surrounding a donation
act and have identified a host of less permanent and more
situational factors that influence giving behavior. Among these
contextual factors are the presence of a friend when they are
asked to donate (Kurt et al.,2011), the way a request is framed
(Merchant et al.,2010) and the sequence of requests (Mowen
and Cialdini, 1980,Freedman and Fraser, 1966). Contextual
factors influencing giving include affect. Research found that
many consumers donate to deal with emotional states such as
pleasure (Levin and Isen, 1975) and guilt (Baumann et al.,
1981) and use donating as a mood management technique
(Dickert et al.,2011). Other researchers found that positive
emotions, includingthose created momentarily, impact socially
conscious consumption behavior such as donating to charities
(Cavanaugh, 2009).
We study donations in a specific context that differs from
those investigated in previousstudies on giving. While previous
research mainly focused on planned and contemplated
donations, the context we examine is more spontaneous.
Previous researchers examined,for example, alumni donations
to their alma mater, organ donations and regular donations to
charities and memberships in nonprofit organizations such as
museums. Even studies that were contextually focused mainly
had nonconsumption-related situations outside stores such as
intercepting students in hallways to ask for a donation.
Additionally, a few studies investigated consumer purchase
behaviors when prosocial attributes are embedded in the
products (i.e. cause-related marketing). For example,
Strahilevitz and Myers (1998)examined in-store situations and
found that consumers pay a higher price for products bundled
with contributions to charitable institutions. Unlike these
studies, we focus on donation request at checkout in our
research. Checkout donations represent a unique charity-
related decision, in which they occur immediately after the
decision to purchase and rightat the instance when consumers
Impact of price promotions
Lan Xia and Nada Nasr Bechwati
Journal of Product & Brand Management
Volume 26 · Number 7 · 2017 · 734–749
735
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