Months ago, the economics blogoshere went aflurry with Radiohead’s decision to release their album on a pay-what-you-can basis. Against expectations, fans commonly paid five, ten, or fifteen dollars, even though they could download it free of charge.
That was music, and a cult audience. They’re probably the same kooks that donate $500 to NPR for a tote bag. What about the ultimate test, you ask? That is: muffins.
It turns out that an Ontario bakery is succeedeeding with an honor payment system:
The bakery conducts audits every six months and Bergen says only once did things come up short.
“Our theory is that two per cent of our sales are being ripped off. ‘Ripped off’ in the sense that there are people who forget to pay or they make a mistake in paying, and then there are people who deliberately don’t pay. And every so often we have to kick somebody out that we know hasn’t been paying,†he says.
“But at the same time we figure we’re being overpaid by three per cent. Some people come in and want a $2.75 loaf of bread, but they see we’re busy so they throw $3 in and walk out. Or, although we discourage tips, some people still give them to us. But because the staff is paid well (the average wage is $15.50 an hour), the tips go into the general pot.
Oh, Canada. How I miss you.
You know, it really is true that we don’t lock our doors. This much Michael Moore got right.
POstscript: Now, there are one or two purists out there who like their Blattman Blog all-development, all-the-time (I’m talking to you, Vij and Michael C). So I get grief whenever I post other miscellany. My excuse this time is that I went to Univeristy in that bakery town. (Tenous, I know.) But then again, this blog thing has my name on it, so phooey to the complainers. One more peep out of them and I’m going to write the one-millionth repetitive, dullard blog post on the gas tax. After that, it will be all Reverend Wright, all the time. You have been warned.
Chris,
There’s an Indian restaurant in Melbourne, Aus (near St Kilda I think) called “Lentil as Anything” which has, for the past 6 years or so, charged customers “whatever they want to pay”.
There’s a black box near the door and you put the money in on the way out. The box is emptied at the end of each day, so there’s no way of knowing how much any individual customer paid.
Place does a good business and most people pay about the same as what an equivalent quality restaurant charges, or a little more.
Not too surprisingly (?) this is not all that uncommon in parts of rural America. Off-season farm stands are routinely stocked with jams, preserves, and bits of whatever happens to be growing at that time of the year with a basket on the counter for payment.
Hmmm, and I went to that very bakery last weekend.
Nice croissants (no muffins, though, I think), and I definitely overpaid, but that was partly due to the stress of being in the place, since it was incredibly busy.
It’s not exactly ‘pay what you can’, though – prices are very clearly posted.
Please, anything but the bleeding gas tax and what a cad HRC is for suggesting that economists don’t run public policy.
And in that anything, how about links for Vij and Michael C.? If only so we have some place to look when you’re just talking about the Ontario-that-isn’t-an-airport.
Somewhat surprisingly, this honour system seems to even work with alcohol: There’s a place in Berlin (Germany) called the ‘Weinerei’. Here, you rent a glass (€1) and can then sample as much wine as you wish. Nobody will keep track of your consumption. You’re simply expected to pay for as much as you think you drank when you leave. Having lived in London for many years, I seriously doubt a similar system would stand a chance there but for some reason it seems to work here in Berlin… I’m still trying to figure out why that is the case.
For press coverage of the place in English, see: http://travel.nytimes.com/2008/02/10/travel/10Bite.html
Blattman–its tenUous. If you are going to bore us with stories about Canada, atleast learn how to spell.
Vij
Doesn’t work quite so well for fruit stands in Japan:
Many of the managers reportedly complain that they make only 80 percent to 90 percent of what they should. However, some of them consider it cheaper than having to hire and pay someone to manage the stalls.
To combat the problem, Toshio Asakawa, a 65-year-old farmer in Asaka, Saitama Prefecture, introduced four vending machines to sell his vegetables.
“Before the introduction of the machines, more than half of my vegetables were stolen every day,” Asakawa said.
He had to spend 3 million yen on the machines, but it seems to have paid off as his sales have increased by 50 percent, he said.