I recently flew to Berlin with my colleagues from the Octalysis Group to meet a client. One evening, while walking around the city, we decided to buy water bottles and discovered a national policy that sparked our interest. At the cash register, the cashier told us there was a 30 cents tax applicable to each of our bottles, as they were made of plastic and carried the following logo.
We were quite surprised that this tax didn’t figure directly on the price tag, as learning about it only at the cash register seems deceiving for the customer. However, the cashier instantly reassured us that the tax was redeemable by simply dropping our empty bottles back in any shop. This is part of the Pfandsystem, a set of German laws to reduce waste and encourage recycling of plastic and glass bottles as well as aluminium cans. This is an interesting move from the government, triggering Octalysis Core Drive 8 Loss and Avoidance in a non-aggressive manner.
Other recycling systems
Before I explain it in greater detail, let me tell you about other anti-pollution policies I’ve seen:
- Some policies are mainly based on Core Drive 1 Epic Meaning and Calling. Governments focus on raising awareness of the damage of plastic consumption on the environment and imploring people to save the environment by recycling or avoiding certain products. As emotional or persuading their messages can be, we know that Epic Meaning and Calling (a White Hat Core Drive) alone is nowhere near enough to change habits of consumption. Indeed, White Hat Core Drives make users feel good about themselves but create no urgency to act, mostly not when our (wasteful) consumption habits are so ingrained in our daily lives that we become “Status Quo sloths” (anti Core Drive 8 Loss and Avoidance): we will avoid any kind of effort to get out of our comfortable habits.
- Other governments take a different approach through aggressive tax or restrictive policies, which tend to create a negative backlash from the population as people feel deceived or abused by them. Only financial hurt is mostly not enough for people to drop their habits.
- Finally, some countries like Thailand encourage people and companies to sell their recyclable bottles to recycling companies like Wongpanit, thus triggering Core Drive 4 Ownership and Possession (accumulating wealth) and Core Drive 2 Development and Accomplishment (instant gratification for accomplishing the desired action: recycling). However, these rewards are low, making their impact on consumers’ habits quite limited. Moreover, they only trigger extrinsic Core Drives, which mostly do not foster long-term habit changes. People will quickly expect higher rewards and, when these don’t come around, will go back to their old habits.
The German Way
So, what makes this German redeemable tax system so interesting? Well it combines the effects of traditional tax policies and reward policies, creating a balance between multiple Core Drives.
First of all, consumers are scared of wasting money if they don’t recycle their plastic bottles by bringing them back to a shop (Core Drive 8 Loss and Avoidance). However, the Pfandsystem is not as aggressive as traditional tax policies: consumers can keep on consuming products packaged in plastic bottles and will effectively suffer no extra costs if they just return the empty bottles. They are thus empowered and made responsible for the financial outcome of their consumption (Core Drive 4 Ownership and Possession) instead of simply being forced to suffer a tax.
Another interesting fact to note is that, because of the loss aversion principle (developed by Tversky and Kahneman), the monetary motivation is stronger when we risk losing money than when we could win money. According to that principle, the risk of wasting the 30 cents invested (for which I feel more ownership than for money that has never belonged to me) will create more motivation to recycle a bottle than the promise of a 30 cents reward. A smart move of this policy is that it takes advantage of both sides of this motivation: we fear losing our invested money (Core Drive 8 Loss and Avoidance) and feel rewarded by physically and instantly redeeming our money when depositing bottles in a store (Core Drive 2 Development and Accomplishment).
The final, and perhaps the most interesting, point to make about this policy is that it doesn’t rely only on Extrinsic Motivation, as opposed to most, but instead offers meaningful choices for people to make about their consumption (Core Drive 3 Empowerment of Creativity and Feedback):
- They can choose to avoid buying goods packaged in plastic bottles to avoid the tax altogether,
- They can buy plastic bottles but bring them back to the shop to redeem the tax and suffer no effective loss,
- Or they can decide to pay the extra tax to maintain their comfortable consumption habits.
In order to create a more balanced experience and foster durable behavioural change within the population, this policy should include more Intrinsic Motivation. For example, every time somebody returns a bottle, they could stand a chance of winning the tax money that has not been redeemed by other customers (triggering Core Drive 7 Curiosity and Unpredictability). Another feature could be for shops to record the number of bottles brought back by each customer and display the “most eco-responsible” consumers, so they feel proud of being recognised as good citizens and are inspired to keep bringing their bottles back to their local shop (Core Drive 2 Development and Accomplishment, and Core Drive 5 Social Influence and Relatedness).
If you want to know more about the Octalysis Group and how we can help your organisation create engaging experiences that foster behavioural change, contact us at email@example.com