The Cost Of Free Doughnuts: 70 Years Of Regret | WAMU 88.5 - American University Radio
Filed Under:

The Cost Of Free Doughnuts: 70 Years Of Regret

Play associated audio

A lot of the online services you probably use are free. Gmail is free. Facebook is free. Yahoo News and NPR are free (though we certainly solicit contributions!). But increasingly, online companies are trying to figure out how to start charging, at least for some services, some of the time.

But today, we have a cautionary tale about charging for things that were once free. It's the story of how one small mistake moving away from free can cause trouble that's impossible to fix.

The story starts when Russ Roberts, a George Mason University economist, started hearing about how veterans don't like the Red Cross. That struck him as odd, and when he asked about it, he always got the same answer: the doughnuts.

"And I thought, the doughnuts?" Roberts says. "What could that be?"

Go to any VFW hall, even today, and you'll get the same story: During World War II, the Red Cross had comfort stations for soldiers overseas, with free coffee and free doughnuts. Then, in 1942, the Red Cross started charging for the doughnuts. Soldiers have held a grudge ever since.

Turns out it's true.

"It keeps coming up, that they were charged for coffee and doughnuts," says Susan Watson, archivist for the Red Cross.

The organization started charging only because the U.S. Secretary of War asked it to. British soldiers had to pay for their snacks, and the free doughnuts for Americans were causing tensions. So the Red Cross complied, after protesting to no avail. It didn't last long — for most of the last 70 years, Red Cross doughnuts have remained free — but veterans haven't forgotten.

Chalk it up to something called categorical change, says Uri Simonsohn, a University of Pennsylvania business professor. Price changes, people can adjust to. But this was different.

"Imagine, for Thanksgiving, you go to your parents' for dinner and after a nice dinner they say, 'That's going to be $10 per person,' " Simonsohn says. "You would be upset."

The problem isn't the price — $10 for a good turkey dinner might not be such a bad deal — but that you're being charged in the first place. It changes the relationship. For the veterans, the Red Cross went from being a little like Mom, to being the corner store.

So for all the Internet companies out there looking to charge for your service — take heed. Changing categories is really difficult.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

'F' Is For Fraudster In A Family Novel For Our Modern Times

Daniel Kehlmann's F, about three brothers abandoned by their father, examines the detail of lives lived without integrity. It is brilliantly translated from the German by Carol Brown Janeway.
NPR

No. 1 Most Expensive Coffee Comes From Elephant's No. 2

A coffee entrepreneur claims his brew is different — and better — than the trendy civet poop coffee. And it starts with the idea that elephants, unlike humans or civets, are herbivores.
WAMU 88.5

Maureen McDonnell Didn't Give Special Treatment To Star Scientific, Witness Testifies

A defense witness in the corruption trail against former Virginia Governor Bob McDonnell and his wife, Maureen, says the former first lady often traveled the state promoting state businesses, countering the notion she gave special treatment to the company at the heart of the corruption trial.
NPR

The Momentum Of The Ice Bucket Challenge — And What It Means For ALS

A recent fundraising challenge has gone viral on social media, calling attention to research into Lou Gehrig's disease. Forbes contributor Dan Diamond discusses the state of that research.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.