Submitted 2 months ago by strawberry@kbin.earth to [deleted]
https://kbin.earth/m/nostupidquestions@lemmy.world/t/333986
I'm guessing it drives more profits
Charitable donations can be written off on the businesses taxes, so by having customers pay for the donations it means the company gets to double dip. They write it off and the customer reimburses them for it.
Moral of the story: don’t donate to corporations. Give it directly to a charity.
This isn’t completely true…
https://www.taxpolicycenter.org/taxvox/who-gets-tax-benefit-those-checkout-donations-0
I stand corrected! I’m glad to be wrong about this one. Hard not to be cynical these days and it’s easy to assume ulterior motlves.
They just write it off, Jerry!
What you’re describing just isn’t compliant with tax law in any jurisdiction I’m aware of.
Can you explain it to me? I’m just repeating what I’ve been told and I’m not a financial person.
Corporations: why spend our own money when we can get these chumps to spend it for us?
The idea is to get people used to visiting KFC.
Donate directly to the charity and get Korean Fried Chicken instead.
Or Popeyes.
The thing to keep in mind is that there exist things which have “circumstantial value”, meaning that the usefulness of something depends on the beholder’s circumstances at some point in time. Such an object can actually have multiple valuations, as compared to goods (which have a single, calculable market value) or sentimental objects (“priceless” to their owner).
To use an easy example, consider a sportsball ticket. Presenting it at the ballfield is redeemable for a seat to watch the game at the time and place written on the ticket. And it can be transferred – despite Ticketmaster’s best efforts – so someone else could enjoy the same. But if the ticket is unused and the game is over, then the ticket is now worthless. Or if the ticket holder doesn’t enjoy watching sportsball, their valuation of the ticket is near nil.
So to start, the coupon book is arguable “worth” $30, $0, or somewhere in between. Not everyone will use every coupon in the book. But if using just one coupon will result in a savings of at least $1, then perhaps the holder would see net-value from that deal.
That said, I’m of the opinion that if a donation directly results in me receiving something in return… that’s not a donation. It’s a sale or transaction dressed in the clothes of charity. Plus, KFC sends coupons in the mail for free anyway.
Not everyone will use every coupon in the book
Most people don’t use most of the coupons. And the company bets on that, no matter what the *potential * value of the coupons is.
It’s the same with mail-in rebates. The promise of them can drive additional sales, but since 40-60% never get claimed, it’s just extra profits at the end of the day.
I don’t have a useful answer, but I commiserate with you. Last time I went to one the lady in the drive through really REALLY tried to keep pushing that coupon book on me. No. I don’t want it. We don’t come by here that often. I don’t care if it’ll save me money now because it won’t in the long run.
Honestly, it left a really bad taste in my mouth with how pushy she was after I repeatedly said “no.”
Corporate probably tied a paltry raise or bonus to them selling a certain amount. Execs are dumb.
Coupons often drive sales for items that people usually wouldn’t buy themselves, sometimes even to people that normally wouldn’t shop there; then once they’ve tried something they haven’t had before, the customer is more likely to purchase that again in the future.
Then there’s additional items you add to the order beyond the coupon.
Finally there’s some rather insane profit margins on some of those items. Even with the coupon, they’re still making profit.
Coupons often say “Cannot be used with any other offer. One coupon per customer per visit.” There’s usually still an overall profit on the entire order because people don’t buy just the one item covered by the coupon. The business can also deduct the value of the coupon as a charitable donation.
$$$$$
SpaceNoodle@lemmy.world 2 months ago
The actual value of those coupons is far lower to them, since they aren’t really losing the proportion of profits - and yes, it drives more business to them.