Reward vs. Loss Avoidance Example

Here is a good example I found yesterday in Fast Company that reinforces one of my posting from a few weeks ago on loss avoidance.

In an article that talks about plastic bags and how bad they are for the environment.  Would you believe we use 380B of those plastic bags you get at the grocery store (each year)?  And, in landfills they last 1,000 years.  I could go on, but that’s not the point of this blog.

Anyways, at Whole Foods, they give the customer a $0.05-$0.10 discount for each bag they reuse (i.e., reward).  They get 20% of people bringing in their own bags.  Ikea charges customers $0.05 for each bag they take (i.e., loss avoidance).  Ikea utilization of plastic bags has dropped by 50%.  People hate to lose more than they like to save.

One Response to “Reward vs. Loss Avoidance Example”

  1. This is true regarding usage reduction. And on the environmental aspect, people need to become more diligent and perhaps aware of the fact that many grocery stores (Safeway, Save-on-Foods, etc) recycle plastic bags into new plastic bags.

    Still not as good for the environment as avoiding the use of plastic all together and using biodegradable paper or reusable cotton, but no need to throw your plastic in the garbage!

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