On my way into work each morning I walk past a branch of a major DVD rental company. Yesterday, a hand-written sign appeared on the door of the branch along the following lines:
“Donate at least £3 to [charity X] and receive a football worth £9.99”
I’ve been puzzling over the idea that lies behind this notice. If it was true, then everytime someone donates £3 and receives a £9.99 ball, the charity is missing out on up to £6.99 that it could have received if the store had sold the football for £9.99 (which, after all is what the ball is worth) and then given the proceeds to the charity. With the way the scheme is set up, the store or whoever is involved buys the football for amount £Y, gives it away for nothing (net loss to store = £Y), receives £3 in exchange (net gain to charity = £3) which comes from the customer (net loss to customer = £3). If the store had sold the ball for its true value and donated the profit to the charity then the net loss to the store = £0, the net gain to the charity = £(9.99-Y) and the net loss to the customer who bought the ball = £9.99. In the latter case the store gains (+£Y), the charity gains (+£9.99 – £Y – £3) and the customer also gains (they’ve given a bigger donation to charity AND, in effect, gained a £9.99 ball for only £6.99). So, given that my idea seems to be a WIN, WIN, WIN situation why doesn’t it occur? Simple, the ball isn’t worth £9.99 so no-one in their right mind would buy it at that price (I suspect that in fact it’s worth almost nothing), and the notice on the store door is untrue…
Tim O'Hare 