A U.S. restaurant tries out an experiment that lets you decide on the bill

Customers ordering a bowl of turkey chili at a St. Louis-area Panera Bread cafe can pay a penny, or $5, or $100. In other words, whatever they decide.

Three years after launching the first of five pay-what-you-want cafes, the restaurant on Wednesday is quietly beginning its latest charitable venture that takes the concept on a trial run to all 48 cafes in the St. Louis region.

A nutritious meal

The new idea experiments with a single menu item, Turkey Chili in a Bread Bowl, available at each St. Louis-area store for whatever the customer chooses to pay.

The new chili uses all-natural, antibiotic-free turkey mixed with vegetables and beans in a sourdough bread bowl. The suggested $5.89 price tax included (Rs. 320) is only a guideline. All other menu items are sold for the posted price.

Panera calls it the Meal of Shared Responsibility, and says the potential benefit is twofold: above-the-cost proceeds go to cover meals for customers who cannot pay the full amount; and for those in need, the 850-calorie meal provides nearly a day’s worth of nutrition at whatever price they can afford.

Cross subsidy

“We hope the suggested donations offset those who say they only have three bucks in their pocket or leave nothing,” said Ron Shaich, founder, chairman and co-CEO of the chain and president of its charitable arm, Panera Bread Foundation.

If the experiment works in St. Louis, it could be expanded to some or all of the chain’s 1,600 bakery-cafes across the U.S., though Shaich said there is no guarantee and no timetable for a decision. Panera has long been involved in anti-hunger efforts, starting with its Operation Dough-Nation program that has donated tens of millions of dollars in unsold baked goods.

Non-profit cafes

The first pay-what-you-want Panera Cares cafe opened in the St. Louis suburb of Clayton in 2010. Others followed in Dearborn, Michigan, Portland, Oregon, Chicago and Boston. At those non-profit cafes, every menu item is paid for by donations.

Kate Antonacci of Panera Bread Foundation said roughly 60 percent of customers pay the suggested retail price. The rest are about evenly split between those who pay more and those who pay less.

The Panera Cares cafes generally bring in 70 to 80 percent of what the traditional format stores do, Antonacci said. That’s still enough for a profit, and Panera uses proceeds for a job training programPanera isn’t alone. A restaurant known as One World Everybody Eats in Salt Lake City adopted the pay-what-you-want idea a decade ago. Cafe Gratitude, a small vegan cafe chain in California, offers a single payment-by-donation menu item each day.

Shaich is optimistic based on what he’s seen firsthand. He worked at the opening of the Clayton store, making food and waiting on customers. He saw well-to-do college fraternity boys leaving without paying a dime, but more often, he saw people being generous. Even those clearly in need dug into their pockets. “A lot of cynics think Americans are just gaming the system,” Shaich said. “Our experience is very different. People do the right thing and are willing to take care of each other.”AP


Similar experiments in the past

  • Software known as freeware is frequently distributed under this model.

  • The rock band Radiohead released an album, “In Rainbows,” in 2007 and let online buyers decide how much to pay.

  • Humble Bundle releases video games as pay-what-you-want downloads, with a percentage of money going to charity.

  • It doesn’t always work. Yogaview, which operates three yoga studios in Chicago, tried a donations-only format at its Wicker Park studio for nearly two years before turning to a traditional payment method. Co-owner Tom Quinn said that while many customers were generous, too many others were not. “You’d get a class with six people and there would be 12 bucks in donations,” Quinn said. “It got frustrating to see how some people weren’t owning up to it.”

  • A study published in Science magazine in 2010 found pay-what-you-want customers will pay substantially more if they know a portion goes to charity.


  • What do you think?

    How much would you pay in a restaurant where you can allows you to decide what to pay. Would you pay less than the guideline price or more? Would such a model work in India? Tell us at school@thehindu.com