Friday, February 09, 2007

The cost of a free coffee

What would you pay for a cappuccino if there were no prices listed? Would you pay at all? The Seattle Times writes about Terra Bite, a cafe in Kirkland, WA does not have any prices listed on the menu board or elsewhere, leaving it up to customers to decide what to pay or not to pay at all. The majority of customer do pay and although the cafe is still not breaking even, it is likely to do so shortly. The cafe was opened by Ervin Peretz, a 37-year-old Google programmer, who started it as a social experiment of sorts to show that people are essentially good and they are influenced by their environment.
Through his "voluntary payment" cafe, Peretz is poised to become the Robin Hood of the Starbucks set. Using an efficient, low-overhead business model and narrow profit margin, he figures he can finesse the largesse of well-off latte lovers to cover the tabs of the less fortunate.


Ann Handley said...

Pretty interesting social experiment. Thanks for flagging it!

Shalini said...

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