Would You Like to Round Up and Donate the Difference? Roundup Requests Reduce the Perceived Pain of Donating

Abstract

Recently, some companies have begun to ask their customers to “round up” transactions to the next highest dollar and donate the difference to charity. However, little is known about how consumers respond to such an appeal. Across a series of lab experiments and one large field study, we find that consumers respond more favorably to a roundup than to a flat donation request, even when the requested amount is identical. We find evidence that the effect arises because a roundup request reduces consumers’ perceived pain of donating. Three alternative explanations are examined (i.e., objective financial cost, inattention to donation cost, and perceived novelty of the request) but not supported. This research has important implications for both companies and nonprofits seeking to increase charitable donations from consumers.