55. Carrots or Sticks?
Or something even better?
Out at a grocery store, when I carried my shopping bag, I received a slight discount, and that made me think about the topic of this week’s newsletter.
I am more accustomed to having to pay for the store’s shopping bags.
So, what do you think is a more effective behavioral intervention to encourage shoppers to bring their shopping bags - an incentive for getting one or a fee for not getting one?
The jury is pretty clear on this based on the evidence from the UK, where the data show that the use of single-use plastic bags has fallen by 98% since retailers began charging for them.
That’s no surprise, as explained by loss aversion (one of the universal principles of behavioral science), people tend to dislike losing more than they enjoy gaining. Paying extra feels like a penalty, triggering more substantial behavioral change. While a discount for your bag is less effective, the reward is often perceived as small and not worth the effort.
But here is a counter-example: economics also says that if you incentivize a behaviour, you get more of it. H&M and many other clothing brands offer schemes that provide store discounts for recycling clothes. Police in Canada issue “positive tickets” – coupons for free food or movie tickets – to reward good behaviour among young people.
So, how do you decide which intervention to use for your objective?
As a parent, I have found that positive reinforcement is a more effective approach to discipline than punishment. Carrots in the form of verbal praise, special privileges, and nonverbal affirmations go a long way for kids, as they help them create a more positive self-identity.
And so I believe it is also true for consumer behavior. A Harvard Business School study analyzing employee motivation and performance rewards found that rewards foster better long-term employee relationships by building intrinsic motivation. I want to be seen as a sustainable shopper, and I do have more positive feelings towards the store that recognizes that part of my identity.
Behavioral science also encourages us to think beyond carrots and sticks - and think of “nudges” — subtle interventions — that can drive behavioral change more effectively. For example:
1. Implementation Intentions - The checkout clerk could ask me -
“Do you plan to bring your reusable bag on your next trip?”
This would force mental planning on my part for my next trip.
2. Social Proof - Messaging on signage, receipts, or apps:
“Join 500,000 smart shoppers who save plastic every week.”
3. Priming - Placing visual cues at the store entrance or the car park to remind me to get my bag (sometimes I forget it in the car).
Gentle nudges like these could lead to more effective outcomes by connecting with the identities we aim to nurture for ourselves.