The Surprising Downside of Scoring Free Stuff

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The only thing better than free stuff is free stuff you didn't expect.

Maybe the front desk attendant at your hotel wanted to do something nice and upgraded you to the honeymoon suite. Maybe a customer service representative decided to throw in some coupons with your return to win back your loyalty. Or maybe you won some money for being the millionth customer at a local retailer.

But a new study suggests that these random acts of kindness aren't as fun for the customers as originally thought.

"Consumer Reaction to Unearned Preferential Treatment," published last month in the Journal of Consumer Research, asks an interesting question: What if getting freebies actually makes us feel sort of guilty?

"It's not that people aren't happy -- everyone likes getting free stuff," says study co-author Joey Hoegg, an assistant professor or marketing at the University of British Columbia. "But the other emotion that we care about is what other people think of us."

And as it turns out, something for nothing is less fun when it makes you feel conspicuous.

In one study, researchers set up booths giving out free samples of a product, but some subjects received more freebies than the other people in the room. When they were told the extras were in return for being "loyal customers," they were happy. But when the "upgrade" was granted without explanation, and in full view of the other test subjects, the lucky recipient wasn't as thrilled with his or her windfall.

We have certain standards of fairness. See, for instance, this famous experiment in which two monkeys received different "pay" for performing the same task:



The monkey getting the grape didn't seem too concerned about the fact that her pal was getting a less appealing snack, but we humans are a bit more self-conscious. When we receive preferential treatment in front of others without doing anything special to warrant it, it saps some of the pleasure we might normally get from the freebie.

Crucially, this doesn't apply in scenarios where the customer has earned their freebie in some way.

"We're definitely not saying that loyalty-based perks don't work, because they do," says Hoegg. If you're skipping the plane-boarding line because you've earned elite status with the airline, you probably won't feel too bad about it. Hey, you've earned it.

But while random acts of kindness may be good for your karma, but they're apparently not as good for business.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

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jdykbpl45

Wish the obama supporters on welfare felt this way.

June 20 2013 at 6:18 PM Report abuse +3 rate up rate down Reply