Pay-what-you-want with charitable giving positively impacts retailers

Purpose The purpose of this paper is to investigate, from the perspective of a retailer, which of two philanthropy programs (pay-what-you-want [PWYW] with charitable giving or mere donation) results in more positive impressions of, and behavioral intentions toward, the retailer sponsoring the program. Design/methodology/approach Two studies investigate the influence of donation format (PWYW with charitable giving versus mere donation) on attitude and behavioral intentions toward the retailer, the second of which also explores equity as the mediating mechanism that produces the more favorable attitudes and intentions. Findings Results indicate that PWYW with charitable giving is effective at enhancing purchase intentions and attitudes toward the retailer. Specifically, results suggest that the implementation of a PWYW with charitable giving format leads to higher perceptions of equity, ultimately leading to more positive attitudes and higher purchase intentions toward the retailer as compared with a mere donation format. Alternative explanations are examined and ruled out. Originality/value To date, research predominantly examines PWYW with charitable giving from a pricing perspective and has yet to explore how it compares with other donation campaigns in terms of the impact on consumers' attitudes and intentions toward the sponsoring retailer. This research fills that gap and contributes to the literature by broadening the perspective by which PWYW with charitable giving is examined. Managerially, the research is important, as it suggests that consumers consider the equity of various donation formats and think more favorably of retailers using more equitable donation campaigns.