Pizza chains around the world are placing a significant emphasis on the generosity of their customers, and one of the leading players in this space is the world’s top-selling pizza chain.
Domino’s has made a generous commitment to contribute $174 million to St. Jude Children’s Research Hospital over the next ten years. The funding for this noble cause will be generated through the company’s ongoing roundup campaign, which encourages customers to donate the difference between their purchase total and the next dollar amount. Over the past twenty years, Domino’s has already raised an impressive $126 million for ALSAC, the fundraising organization associated with the Tennessee-based hospital. This new pledge will further strengthen their support for the hospital’s important work.
According to Engage for Good, Domino’s has emerged as the most prominent and successful example of “checkout charity.” In 2022, the fundraising initiative raised a staggering $749 million, a 24% increase from the previous year, making it one of the highest-grossing programs.
The enduring resilience of franchises has instilled hope in them that consumers will persist in contributing their spare change, even in the face of increasing online shopping trends, challenging economic conditions, and concerns about donor fatigue from frequent solicitations. Additionally, retailers are further strengthening their partnerships, which were initially established in the wake of the 2020 racial reckoning, as corporate social responsibility takes center stage in business operations.
Why it works
This Article Includes
According to a study published in the Journal of Consumer Psychology, research indicates that asking customers to round up their payments tends to be more effective compared to requesting a fixed amount, even if the overall total remains the same. The reason behind this lies in the psychological effect of framing, which helps reduce the perceived discomfort of parting with one’s money.
According to the research team led by Katie Kelting, a marketing professor at Saint Louis University, participants reported that the experience felt less painful.
According to Ike Silver, a marketing professor at Northwestern University, the timing of the appeal incorporates various psychologically influential factors. Buyers typically envision their purchases in rounded numbers, such as coding a $24.75 bill as $25, for instance.
Silver explained that the convenience of automatic donations makes the act of giving “a bit more mindless”. When shoppers are in a hurry to get through the checkout line, they don’t have much time to contemplate reasons against making a donation.
According to Silver, companies take advantage of our tendency to make purchases without much thought. We often spend money without considering the consequences or the value of what we’re buying.
Helping PetSmart help animals
Advocates of this strategy attribute its success to its ability to engage everyday individuals who aspire to become donors. This approachable form of giving has low barriers to entry, making it accessible to a wide range of individuals. In fact, the practice has become so prevalent that the cumulative gifts from shoppers have emerged as a significant source of funding for certain cause areas.
PetSmart Charities is recognized as the leading organization supporting animal welfare causes, with a significant portion of its cash donations being contributed through the PIN pad at checkout. For the past two decades, this pet superstore has successfully operated its ongoing PIN pad donation program, encouraging customers to contribute a fixed dollar amount starting at $2.
The funds go towards initiatives that directly benefit pets, such as providing better access to veterinary care and aiding in the evacuation of animals during natural calamities. This genuine connection is a key factor in why Aimee Gilbreath, President of PetSmart Charities, states that their average donation is slightly less than $3. With this rate, they are projected to accumulate a total of $40 million by the end of the current year.
Gilbreath anticipates that if their missions were not closely aligned, they might face slightly more difficulty in convincing customers to donate.
According to the speaker, the act of making a donation becomes much simpler when individuals receive a personalized message that resonates with their own interests and values. For example, instead of a general appeal for donations, a message that highlights the connection between the donor’s love for pets and the support provided to pets in need through PetSmart Charities would be more effective. By framing the request in this manner, it becomes easier for people to say yes, as they can see how their contribution will directly benefit and support pets.
According to Kelting, the alignment between the charity and the seller is incredibly significant. Researchers have found that customers may see point-of-sale solicitations as a breach of their social contract with a company. However, partnerships between like-minded organizations are generally perceived in a more positive manner.
Donations follow connection at REI
In 2021, REI Co-op, a specialty retailer of outdoor clothing and equipment, introduced its member-supported public charity. The purpose behind this initiative was to foster inclusivity in outdoor spaces by providing additional support to the surrounding communities as they recover from the impacts of COVID-19 shutdowns.
Sales associates at REI’s 185 U.S. locations frequently engage in personal conversations with customers regarding their upcoming outdoor adventures. This genuine connection with nature enthusiasts provides an opportunity for donation requests at the checkout counter, explains Squire Simpson, a board member at the REI Cooperative Action Fund.
REI cashiers aim to conclude conversations with customers by offering an open-ended ask, allowing them the freedom to decide whether they want to round up or donate a specific amount. In 2022, stores were able to raise approximately $2.2 million through 1.3 million individual donations, marking a 2.5% increase compared to the previous year, as reported by Simpson.
Among the grantees are a Pennsylvania organization dedicated to promoting biking among Black women and an Alaska non-profit organization that offers therapeutic recreation for individuals with disabilities.
According to Simpson, the recipient of the donation is not a large, corporate entity.
‘Checkout charity’ fa
tigue?
However, there are concerns among some observers that the increasing popularity of “checkout charity” may diminish its effectiveness, despite the good intentions behind it. Professor Silver from Northwestern University raises doubts about whether these programs will continue to be successful as more similar initiatives emerge in checkout lines across the country.
According to the expert, if a certain action, such as swiping a card, consistently triggers a particular response, people may become aware of this pattern and feel like they are being manipulated.
According to tax policy experts, it is important to note that stores are unable to write off customers’ point-of-sale donations as company income, despite what popular internet memes may suggest. Misinformation on this topic is not helpful and it is crucial to understand the correct information.
Domino’s leaders maintain a strong belief in their well-executed strategy. They have successfully established themselves as one of the most recognizable brands in terms of point-of-sale donations, with the iconic St. Jude child featured on their pizza boxes.
At the top of the checkout widget, you will find a compelling appeal with an image of a child. Throughout their 11-week end-of-the-year campaign, customers are presented with a convenient “click and go” pop-up that encourages them to donate $2, $5, $10, or $20. The request provides information about the impactful work of St. Jude and includes a tracker to show the overall donation progress.
Domino’s managed to raise an impressive $8.9 million last year through its roundup initiative. With a new five-year strategy in place, the company’s leadership is confident that this number will only continue to grow, further expanding their customer base.
According to CEO Russell Weiner, the high-dollar charitable commitment is an audacious goal that is not necessarily a slam dunk. This commitment serves as another motivator to meet the company’s latest nonprofit benchmarks.
ALSAC CEO Rick Shadyac has stated that the additional funding from Domino’s will greatly support St. Jude’s mission to improve the survival rate for children with the most common forms of childhood cancer in 80 countries. This funding will also contribute to the launch of a program, set to begin this summer, which aims to provide free cancer medications to 30% of the 400,000 children worldwide who are affected by this disease.
According to The Associated Press, Weiner explained that increasing sales and expanding their store presence would ultimately lead to more customers. He emphasized that the more successful they are in these areas, the more individuals they can support and raise funds for St. Jude.
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