Academic

We all know that the mark-up on many products is probably more than 100%.  So, if you really like that $50 sweater, in a few weeks it may be "buy one, get one 50% off," and if you can hold out until the end of the season, it may be "buy one, get one free."  (I remember this scene from The Jeffersons where Florence the housekeeper hands Louise a hat, explaining that the store was having a "BOGO free" sale.  Then Florence says Louise owes her the price of the hat because Florence kept "the free one.")

But "Buy One, Give One," has become a socially responsible marketing gimmick as well, expanding on the familiar "we give a percentage of the profits from the sale of "X" to "Y" charity" campaign.  For most businesses, these are just gimmicks.  If the business wants to give a percentage of profits to its favorite charity, then it can do that without involving consumers in any way.  But the Toms Shoes BOGiveOne campaign has seemed more integral to the business plan of the popular shoe store.  From its inception, the company has donated one pair of Toms shoes to children around the world, citing shoelessness as contributing to disease and not attending school.  People seem to love this business model and love wearing the same shoes that are distributed.  Now, a cynic might also say that people get a sense of "Prius Piety" from wearing the distinctive shoes, signalling that they made a socially responsible footwear choice.  The shoes are pared-down enough that they may not have been popular without the "I'm basically wearing rags wrapped around my feet with no arch support because I care about shoeless children" dimension.  (Of course, people buy Crocs, so who knows.)

So now other entrepreneurs want to capitalize on this willingness of U.S. consumers to choose goods that make them feel good.  Most are not bold enough to sell a product at 2X its market value to fund the BOGiveOne model, though, so the models aren't usually one-for-one.

I guess I feel the same way with these goods as I do with school fundraisers.  If I want a pair of espadrilles, then sure, I'll buy a pair at the store that will ship a matching pair to someone who needs it, particularly if that pair isn't substantially more than the marked-up pair at the department store.  But I'm not going to let it make me buy something I don't want.  So, I'm the parent who says, "Instead of my buying $50 worth of overpriced wrapping paper so that the school gets $25 worth of supplies, why can't I just write you a check for $25?"

But Toms isn't just selling a good sale, it's selling a mindset, almost a lifestyle.  For many years, we would go eat at Chili's on St. Jude day, when the profits go to St. Jude's Children's Hospital.  The wait is amazingly long, which speaks well of how much people like the charity.  But, standing in line with three restless children, I often wonder why we aren't eating somewhere else and just writing a check to St. Jude's.  What keeps us in line is (1) For $50 we can eat and give to St. Jude's, but if we went somewhere, that amount would be more and (2) it's sort of meaningful to be at Chili's on St. Jude day,  talking to your kids about how fortunate we are and remembering the ones that aren't.