That spare change you donate at checkout is adding up to millions for charities

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So-called point-of-sale donations have sharply increased in recent years, bringing in hundreds of millions of dollars a year. But the requests to "round up" your bill for charity have really taken off. / Josie Norton for NPR

We've all been there: A store cashier asks if you'd like to donate money to the local food bank. Or the PIN pad at the checkout counter prompts you to round up your payment for charity — spare a little change for a worthy cause.

Those "round-up" campaigns have become ubiquitous in recent years — at grocery chains, gas stations, retail stores and online merchants — and they rake in millions of dollars annually for everything from scholarships to cancer research.

In 2022 alone, charities raised $749 million nationwide through so-called point-of-sale donations, a 24% jump from 2020, according to Engage for Good, which tracks this type of charitable giving. And that was just from campaigns that brought in $1 million or more. Although that figure was tiny compared to the nearly $500 billion in estimated charitable giving in 2022, total giving actually dropped that year.

But it's the round-up fundraising strategy, which was first introduced about 15 years ago, that has really taken off in recent years, according to Michelle McCarthy, executive director of Round It Up America.

"Especially since the pandemic, we've seen a big increase," says McCarthy, whose nonprofit provides legal and financial guidance for for-profit businesses that collect donations for charities.

Much of that growth is fueled by customer generosity, but those who study consumer behavior point to other factors, too, including how we think about money and even our unconscious feelings of guilt.

It makes sense (and dollars) to ask for less

Michael Rindos says he "almost always" taps the donate button on the credit/debit card reader, or PIN pad. But lately, that's been changing. "I don't do it as much as I used to," Rindos says, as he juggles an armful of groceries outside a Giant Food supermarket in Severna Park, Md., near Washington, D.C.

Rindos said he's noticed a sharp uptick in the number of requests popping up in places he shops, and it's become a bit tiresome. "Every place that you go to — Taco Bell, 7-Eleven. They're all doing it."

Data suggests that despite being bombarded by such requests, Rindos and others like him are giving more each year at cash registers, self-checkouts and online. And it has resulted in a huge boost for charities on the receiving end. Consider the Taco Bell Foundation, a nonprofit that operates independently from the fast food chain. It brought in $42 million last year on round-ups collected from the company's more than 7,500 restaurants across the U.S. The average donation: just 44 cents.

Previously, the foundation's fundraising strategy asked customers to donate $1 to a scholarship program in campaigns that lasted a few weeks or months. "For many years we did that," says Jennifer Bradbury, the foundation's executive director. "We had our scholarship program and we had our community grants program, which funds nonprofits like the Boys & Girls Clubs and Junior Achievement."

But in 2019, the foundation decided to try a different approach. Bradbury says it realized, somewhat counterintuitively, that less is more. "The data we had at that point was that customers were three times more likely to round up than to donate a dollar," she says.

The results after the switch were "mind-blowing" she says: The foundation roughly doubled what it had been raising, which averaged between $11 million and $14 million annually, but hit more than $20 million in 2019. The change was so successful, the foundation decided to permanently adopt the new strategy. "The number of regular customers who donate every time and round up every time — it's really inspiring," Bradbury says.

Children's Miracle Network Hospitals, which raises money for pediatric hospitals, partners with such retail giants as Costco and Walmart, as well as Ace Hardware, Panda Express, 7-Eleven and DQ. In 2022, the network, with the help of its partners, raised $138 million through 78 point-of-sale fundraising campaigns, including round-ups, it says. These campaigns made up a third of the CMNH's total fundraising for that year. An online survey conducted by the network in 2022 polled some 4,000 customers. It showed that of the 88% of respondents who reported being asked to donate at checkout in the previous year, more than half said yes at least once.

How you perceive "pain" may influence how much you donate

Why have round up for charity campaigns proven so successful? Katie Kelting, an associate professor of marketing at Saint Louis University, suggests that there's some powerful psychology at work.

In 2018, Kelting and her colleagues enlisted the St. Louis Zoo in a field study. Instead of asking food court patrons for the usual $1 donation for a wild animal conservation effort, the zoo temporarily tried the round-up approach. Fundraising jumped 21% during the experiment, which ran for a few weeks. Kelting calculated that over a one-year period, the zoo would have brought in about $8,000 more by simply changing the way customers were asked to donate.

As Kelting explains, a lot of it has to do with the "pain" of parting with our hard-earned cash. "The perceived pain is less in the consumer's mind when that round-up request is presented," compared to a solicitation for a specific dollar amount, she says.

There are likely other factors in play, says Ike Silver, an assistant professor at Northwestern University's Kellogg School of Management. Humans, for instance, appear to have a fairly strong preference for round numbers, or figures ending with a zero. A 2013 study looked at purchases at self-serve gas pumps and found that 56% of them ended on a round dollar figure — far exceeding mere chance. The same study noted that at restaurants, many people prefer to leave tips that bring the final bill to a round number.

"It's like an effort-reduction strategy whereby people are better at and intuitively prefer to deal with round numbers," Silver says. "That manifests in how much you want to pay and how much you want to buy."

Arguably more important is that point-of-sale charitable requests can transform an ordinary purchase into a moral quandary, he says. "It becomes an opportunity to signal to yourself and others that you care," Silver says. In the case of the round-up request, it becomes something of a moral test, he says. "It's such a low-cost ask that to say no starts to induce slight feelings of guilt."

Kelting, citing a body of research by others, says that customers might also change their behavior and perceptions in public versus private settings. In this case, the self-checkout is analogous to a private setting where it is easier to decline, but the same decision in front of a cashier — especially one who adds a verbal prompt for the donation — is something different. "When you're in the long checkout with the cashier, with everyone around you, that's more like this public setting," she says.

Round It Up America's McCarthy says the data supports this thinking. "Customers do appreciate being asked, so that prompt at the checkout does make a difference."

But Cait Lamberton, a professor of marketing at the University of Pennsylvania's Wharton School, cautions that there's a potential downside to all of this. Customers, she says, may feel manipulated and could end up "feeling resentful toward the source of the manipulation" — the retailer doing the collecting.

Shoppers want to know where their money is going

Paula Nichols says she never taps "Yes" on the PIN pad when it prompts her to round up her bill. "Does that make me a bad person?" she laughs, as she loads groceries into the back of her SUV at the Giant Food supermarket in Maryland.

It's not that Nichols minds giving to charity. She says she supports a local nonprofit food bank and is friends with its president. "We do a lot with them."

But when it comes to giving in the checkout line, she's wary. "How do I know where that money is going? And the price of food? I just spent almost $200 on this," she says, nodding to the groceries in the trunk.

In 2022, a CVS customer filed a lawsuit against the pharmaceutical chain claiming that it wrongly used money collected through point-of-sale donations to honor a pledge to the American Diabetes Association. In a statement to NPR, the pharmaceutical giant says the suit was dismissed in September 2023, which "allowed CVS to complete its in-store National Diabetes Month Campaign, which collected more than $10 million in donations for the benefit of the American Diabetes Association."

Round It Up America says its agreements are designed to ensure that charities receive more than 90% of the money collected, and charities can spend no more than a quarter of donations on administrative costs. McCarthy says her organization receives up to 7% "to cover our legal and financial costs" and stores can take up to 2% to cover credit card transaction fees.

"Consumers deserve — and state attorneys general require — transparency and assurance that the donations go where they are advertised and intended," McCarthy says.

Save the Children is one organization that has made extensive use of point-of-sale campaigns, including requests to round up. "We can try to influence [the message] put on that PIN pad or what the store associate says," according to Dan Peirce, who is in charge of the nonprofit's corporate partnerships. "But ... operationally they have to make sure that it works for them. And so they do have the final say."

The ride-share company Lyft runs a campaign that helps customers take a more considered approach to giving. Riders can select from a list of charities on the company's app. Then each time they ride, their bill is automatically rounded up to the nearest dollar to benefit their charity of choice.

"If you go to your profile in the app, it'll say something like, 'You know, you've given X number of times' to kind of remind people that this is a good thing, even though ... it was 50 cents here, 20 cents there," says Jeremy Bird, the company's chief policy officer. "It's been a massive success for us."

How much is too much?

Despite the burgeoning success of point-of-sale fundraising, including round-up solicitations, there's the risk that customers could become overwhelmed with these pervasive campaigns. "I think you have to be very careful because so many people do find these annoying because they're not relevant to what they're doing at the moment," which is making a purchase, says Lamberton, the Wharton professor.

Kelting, too, says this could be a problem worth studying. "You might have donated yesterday [but] you forgot to buy milk." So, what happens, she wonders, if you go back the next day for that carton of milk. Are you less likely to round up your bill the second time?

Another potential downside? Quick point-of-sale donations might not do much to create any meaningful connection with charities, Lamberton says. Donating your virtual pocket change to a cause might elicit a sugar high for the ego — but one that quickly fades.

It's harder to stand outside a store, ringing a bell to ask for donations, "but what you are getting is a lot of exposure," she says. "So you're building familiarity."

In a face-to-face solicitation, she says, "people who do engage with you are probably very positively disposed towards the charity already."