On Earth Day 2009, Loblaws started charging 5 cents for disposable plastic bags. Initially, I grumbled that grocery stores have found a way to make a tidy profit on an item that costs them, perhaps, 2 cents. But, paying an extra 50 cents for plastic bags has a way of changing consumer behaviour in a hurry. I wasn’t about to allow Loblaws to continue to ding me nickels, so I threw a few reusable bags in the trunk the next time I went shopping. At the checkout, I found a less publicized side to the story: Loblaws gives a bonus of 50 PC Points (worth about 5 cents) for every reusable bag. In other words, it is not a simple rip off: Loblaws penalizes customers who use plastic bags and rewards those who ditch them. The company also says that part of the proceeds goes to environmental causes but it is possible that some of the levy falls to the bottom line.
The program is a fascinating case study in how incentives influence behaviour. Loblaws had been trying to entice customers to opt for reusable bags by offering 50 PC Points with little success. But, when a 5 cent charge was instituted, the company says customers reduced the use of plastic bags by 55%. Metro, which recently instituted a 5 cent levy, also reports a 70% reduction in disposable plastic bags. I’m not surprised – we don’t buy plastic bags at Loblaws anymore.