If you’ve ever been awkwardly asked to donate money to a charity at a checkout counter, right after handing over money to that retail store, there is a startup that wants to fix the interaction.
Parvenu co-founders Johnny Li and Patrick Hoban were prompted to change the process because Verifone, the software that supports the checkout system, allowed third-party developers to create add-ons to the experience in October 2017. Previously, the software behind the checkout process could not be modified by companies outside of the retail store.
The retailer would pick the charity to which you’d be donating and usually retain 50 percent of your total donation amount.
Parvenu uses artificial intelligence to make donating at a checkout counter smarter. Instead of a retailer asking its customers to donate to a single pre-selected charity, Parvenu’s software will recommend a charity aligned with a user’s shopping habits. If you are buying shoes, you would be asked to give to a charity that donates footwear. If you are purchasing baby formula, a charity that supports children would be your option.
The display on the checkout screen would also become more inspiring. When you choose to donate, a progress thermometer shows the total amount raised toward a goal. You would also see the organization’s Charity Navigator ranking.
Li said “retailers want to show the community that they care… whether they are small stores or big chains.” Making this step in the checkout process personalized and informative could help convey that to customers, he said.
Hoban is familiar with this process after spending a year fundraising for Save the Children and The Nature Conservancy. The two met while traveling to a Yu-Gi-Oh competition.
One company already in this space is U.K.-based Pennies. When checking out with one of its partner retailers, users are asked to donate as little as one penny or a few pence to a charity. The simple approach to donating requires no promotion from cashiers, so customers are free from the anxiety caused by verbally declining to donate to a worthy cause.
In December 2017, the team tested their concept with five independent retail stores in Texas. The test showed 25 percent of customers who were asked to donate to a charity that aligned with their interests donated. The average donation rate in the current checkout environment is 8 percent.
This month Parvenu is crowdfunding through Wefunder, after raising money from friends, family and private investors. It also completed Seed Spot’s incubator for social entrepreneurs, which earned it $100,000 worth of Amazon Web Service credits. Once the firm reaches its funding goal of between $162,000 and $250,000, it will first target retailers that embrace technological innovation.
When asked if the company will take the standard 50 percent transaction fee, Li said Parvenu would charge a 10 percent fee to customers because charities should be profiting from this innovation, not the intermediary company.