Treat or treat: How business design can make spending money more pleasant - for the better and for the worse.

Have you ever wondered why IKEA offers hot dogs for 99 Cents right after the cashier’s desk?

Think back to your last visit at an IKEA store. After the hustle of finding a parking slot, they have created a great customer experience. You get inspired from the point you enter the store. The decoration, how they present their products and set up the small rooms, all the labels and communication in store – great. But then the inevitable happens: You have to find your stock in the warehouse, fit it on your tiny cart and push it to the cashier’s desk. Of course you packed more than you intended before and you are already scared of the receipt. The thought about shoving everything into your car or organizing the delivery is also not helping here.

But exactly in this second, you recognize the food stand. A decent hot dog for 99 Cents? Even a vegan option? And wait: There is also a small grocery section where you can pack these awesome oat cookies that you love so much? What a treat! Your mood lightens up instantly.

A hot dog can’t cost 99 Cents, right? You would pay at least double the price at any other place for the same product. They can’t make any profit with this. So why are they doing it? It is not an error, nor a coincidence, of course. It is a deliberate design choice to boost your experience when it is at the all-time low of your visit. And it is a great example for what is called positive reinforcement. They make you feel good right after the purchase.

The power of POS Treats.

What companies ultimately need are customers who spend money on their products. Conversely, most customers avoid spending money, or in other words, consider every purchase against the value it creates for them.

Obviously, successful companies have created products that provide greater value than what they are priced at. Often times, pricing is a decision that comes at the end of product or service development and setting an appropriate price is hard in most cases.

But that is not the end of the story. There are more ways of influencing people’s buying decision and experience at the point of sale. Many companies approach this issue by consciously designing treats for their customers that make spending money more pleasant for them. Think of these treats like the piece of nice chocolate you get with a restaurant bill.

POS Treat: A deliberately designed intervention at the point of sale (POS), that positively reinforces a buyers purchasing decision.

Treats for the worse.

Some will say that this is manipulative. And yes, it absolutely is. This is why such treats need to be under scrutiny. They can be used not only for the better but also for the worse.

The online game CoinMaster seems like a children’s game at first glance. You build and upgrade buildings until you own a nice village. You can attack and destroy villages of other players and get to defend your village against raids. So far so good. However, every action you can take in this game is driven by the outcome of you playing on a slot machine. You go for a try and earn coins, with which you can then build your village or battle your opponents. You don’t have unlimited tries, though. After a certain number of attempts you will be blocked for an hour, during which you are unable to do anything and have to watch your village being destroyed. The simple way out is to buy attempts for the slot machine for real money. Right after your purchase, you can go back to the slot machine and go defend your village. What a treat! Coin Master is designed to directly reward you for spending money.

This all sounds like gambling to you? Many argue it is and there is even a petition that tries to stop this practice of luring children and adults into spending real Euros for virtual products.

It comes back to the exact same thought and technique – positive reinforcement – but it is clearly harmful for society.

Treats for the better.

Fortunately, there are examples where treats are used for the better. The fashion industry is under criticism for compromising environmental and social aspects for lower consumer prices. Companies like Patagonia or Freeset Fabrics are known for their effort in producing sustainable clothing, the shoemaker TOMS, however, set out to give customers an additional treat when buying one of their products:

For every pair of shoes that was sold, TOMS gave one pair to people in need. They had practiced this One for One® business model for 13 years until they moved on to their new system in 2019: Promising to give at least one-third of their net annual profit to a giving fund managed by their very own Giving Team. This team works closely together with communities and partner organizations for example in Kenya, India and Ethiopia in order to maximize the impact.

They document their work in their annual Global Impact Report and whenever you are in a TOMS shop, you will be reminded of their efforts. And you will feel better knowing that they do what they do when making your purchase.

It’s also up to us, designers.

From what we have seen, these treats that positively reinforce customers when making their buying decision, proof to be highly effective. At the same time, designing them is a complex task.

Clearly, it is about keeping in mind the manipulating and negative aspects that such designs can potentially have. Also, initially implementing these treats will come at a cost and will often have a negative impact on the bottom line of the company in the short term. It is an investment that, if designed thoughtfully, will have a positive impact for customers, the company and sometimes even society as a whole.

Ultimately it is again about understanding your customers and finding out what treats rock their boat.