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Pay What You Want Panera Racks Up
Proving that people are basically good, the pay what you want Panera opened a year ago is steadily posting profits. The concept is simple, provide a restaurant where 100% of proceeds will go to charity but instead of charging set prices, the company suggests the regular retail price of the item, but you are free to pay what you want.
With signs such as “Take what you need, leave your fair share,” cashiers also tell people the suggested price. Early data showed that between 60% and 70% paid the full price, 15% payed more, and 15% paid less or nothing at all. Panera pinned its hope on people doing what the felt was best and it seems to be working. According to Panera, the store performs at about 80% percent of retail and brings in revenue of about $100,000 a month. The result is $3,000 to $4,000 a month above costs. The program has been such a success that Panera is considering building more such stores.
This is not to say that some have not taken advantage of the system. From published reports it appears that younger customers have been more likely than others to take far more food that what they have paid for. But, on the other hand, there have been customers generous enough to leave a far greater donation than the value of the food that they have taken.
I like this “teach a man to fish” approach at charity. You get a decent meal, pay what you perceive the value to be, and your money goes to job training and other charitable activities that support the local community.
Do you think that this would work in your neighborhood?
This post was included in the Totally Money Blog Carnival #20: “What Would You Do?” Edition hosted by Outlaw Finance.
