Analysis: Can Pennies change the future of giving through shopping?

Sophie Hudson looks at how top-up donation schemes are faring

Pennies asks customers to round up their bill with the difference going to charity
Pennies asks customers to round up their bill with the difference going to charity

The announcement last week that customers of Domino's Pizza had made a million donations to charity through the Pennies micro-donation scheme since its launch in November 2010 was something of a milestone for this donation method.

But how much is being raised through micro-donations, and are enough retailers getting involved for it to make a significant difference to the sector in the coming years? Such schemes add a stage to the payment process and some worry this could cause delays and deter shoppers.

Pennies, now used by eight retailers, has raised almost £400,000 for charity since its launch. It asks customers online or in store using a credit or debit card if they would like to round up their bills to the nearest pound, with the difference going to charity.

More than £230,000 has been given by customers of Domino's - the first retailer to join the scheme. And more than £100,000 has been raised by customers of the toy shop The Entertainer in just over six months.

Rebecca Rees, marketing manager for The Entertainer, says the scheme has not put customers off as initially feared. "People understand the extra button they have to push on the card machine when entering their pin number and we have seen no delays in processing transactions," she says.

Rees says the scheme has fared particularly well compared with traditional collection tins, which it had on its shop counters for nearly 30 years but no longer uses. She says the total annual amount donated by collection tins failed to reach £2,000 - so in six months Pennies has multiplied its donation figures many times.

Alison Hutchinson, chief executive of the Pennies Foundation, the charity that runs Pennies, will not comment on any concerns retailers have voiced, but says it will announce a number of new retail partners in the near future.

"We are talking to a breadth of different retailers, from the large to individually owned small merchants," she says. "We want to be inclusive and are looking for ways to help retailers of all sizes and channels."

A spokeswoman for the foundation says 100 per cent of donations go to charity and will not say if there are any costs for retailers.

Pennies is not the only micro-donation scheme. Shortly after it was launched, Cancer Research UK, the British Red Cross, Great Ormond Street Hospital Children's Charity and the WWF announced they had joined forces for Give Change Make Change, which was launched with the online designer retailer BrandAlley UK in August. Denise Bailey, the scheme's partnership manager, says the only cost involved is that the four charities pay 0.85p for each donation to a technology provider, RSM2000, which acts as a bank and then distributes the money between the charities.

She says 10 per cent of customers have used the scheme, £14,000 has been donated and there has been no impact on the online checkout rate. Two other online retailers have also joined the scheme - the contact lens company Feel Good Contacts, which has raised more than £1,000 for charity in six weeks, and the diamond retailer Dejoria, for which no figures are available.

Give Change Make Change asks customers to round up to the nearest £5 in the case of BrandAlley, and to the nearest £10 in the case of Dejoria. "If you spend £2,500 at Dejoria, rounding up to the nearest £10 doesn't seem like such a big ask," says Bailey.

Asked whether the scheme has had trouble getting retailers on board - only three are using it more than a year after it was started - Bailey says the BrandAlley UK case study has been helpful in recruiting other major retailers.

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