Success for the Honor System
July 21, 2010 by Andrea Bennett
This just in: People are basically good.
At least according to an experiment conducted by Panera, which operates 1,400 franchised and corporate-owned bakery-cafes across the country. Since we called attention to a New York Times article on June 4th about the first pay-what-you-wish Panera – in suburban St. Louis – the company has decided to expand the honor bar concept to locations around the country based on results from the vanguard café.
Panera CEO and founder and Ron Shaich told USA Today in May that he’s “trying to find out what human nature is all about” with the new format, in which cashiers tell customers the suggested price of their order based on the menu, with the idea that those who could afford it would pay full-price or even extra, and those who couldn’t could get a cheap or free meal – and offer to volunteer if they felt responsible for making up the difference.
The model has had its critics, but according to an Associated Press article, about 60 to 70 percent pay in full for their meals, with 15 percent leaving a little more and another 15 percent paying less, or nothing at all. A handful of patrons so far have left big donations, like $20 for a cup of coffee. Shaich told AP that the restaurant took in $100,000 in revenue its first month – but didn’t identify the restaurant’s margins between costs and revenue. Still, according to the piece, Shaich predicts that the location will be able to cover its costs within months and eventually generate cash for charity.
If a pay-as-you-wish Panera moved to your neighborhood, would you subsidize someone’s lunch…or even volunteer your time?
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3 Comments
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July 22, 2010 by joe
I am sure I will pay the suggested money for my main meal. But, if I want a soda or side along with meal, I might pay less for those items since the price for them are always jacked up. Since many local restuarants offer free lunch after the 7th or 8th meal, I might be tempted skip payment on certain meals if I am regular customer.
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July 24, 2010 by Judi
I would try to pay the suggested price, but I agree with Joe that I would pay a little less for soda and sides. I believe that some people would not pay at all though. They would think that it is free food and why not take advantage of it.
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August 31, 2010 by Francesco
I think it's a wonderful idea that can make people think more about their own behavior and decisions. Actually I would pay as usual, and I agree with others, probably I would pay the "right" price for drinks or things that are often too expensive. But also, I think that people who cannot really afford to pay the entire meal, could find it of help.
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