From fare evasion to illegal downloads: the cost of defiance

Justified? evan p. cordes/Flickr, CC BY

Australian households currently pay the second highest “honesty tax” in the world at $290 per household per year, levied by retailers to offset the $AU1.86 billion in losses they incur from customer theft.

Theft is only one type of consumer deviance, which can include behaviours that are against the law, an organisation’s policy, or behaviours that violate normally accepted conduct. An individual’s “deviant behaviour” can vary from one person to the next.

My research exploring consumer definitions of right and wrong has found a number of things can inform what an individual thinks is “deviant behaviour”, beyond what the law or organisational policy states as right or wrong. Consumers then use their own justifications to excuse their actions.

Individuals could look at how prevalent the behaviour is (“everyone else is doing it”), the risk associated with doing it (“I won’t get caught”), what the outcomes will be (“no one is getting hurt”), and if they think it is fair (“the organisation isn’t giving me what I want, they’re making me do this”). Consumers use justifications to let them perform deviant behaviours, without feeling too bad about it. Behavioural economist Dan Ariely calls that the “fudge factor”, in his research on irrational behaviour.

With everyone having different ideas of what is right and wrong, it can lead to disagreements at a societal level. A study examining the extent of these disagreements found that as a society, we can agree on the polar acceptable and unacceptable behaviours, but everything in between is very grey. Here’s a list of behaviours ranked from most acceptable to least acceptable:

  1. Using the 4 cents fuel voucher from the grocery store to buy petrol (benchmark acceptable behaviour)
  2. Creating a fake US iTunes account to access and pay for content not available in Australia
  3. Returning merchandise to a store by claiming it was a gift when it was not
  4. Saying there are only 2 people staying in a holiday apartment when there are really 4
  5. Illegally downloading TV shows from the internet for free, for personal consumption
  6. Lying about a child’s age in order to get a lower price
  7. Not saying anything when the waitress miscalculates the bill in your favour
  8. Evading fare on public transport
  9. Reporting a lost item as “stolen” to an insurance company to collect the money
  10. Using stolen credit cards to order goods over the internet
Using an ‘it’s wrong, don’t do it’ approach doesn’t always work� Colin Charles/Flickr, CC BY-NC-ND

Behaviours were likely to be deemed “acceptable” if the individual did not think anyone was being harmed. This can explain why “not saying anything to the waitress when she miscalculates the bill”, is closer to the unacceptable end of the ranking, because the victim (the waitress) is visible. Most consumers empathise with the waitress, and assume she will have to pay the difference out of her own pocket. Whereas in the scenarios “lying about a child’s age”, or “lying about how many people are in the hotel room”, the victim is the organisation – a big, faceless entity, which is difficult to empathise with.

When people disagree on whether a behaviour is right or wrong, that makes it very difficult for organisations to police. Using an “it’s wrong, don’t do it” approach to deterring deviant behaviour becomes ineffective, because the consumer can respond with: “actually I don’t think it is wrong,” or “I know it is wrong, but here is a justification for why I’m going to do it”.

Disagreements about what a “deviant behaviour” is means consumers will look to others to guide their actions – “what is everyone else doing?” and “are they being rewarded or punished for doing it?” If the consumer is likely to achieve a goal through deviant behaviour, like riding the train for free, or being able to watch a TV show, without getting punished, they are more likely to go ahead with it.

What isn’t helpful in predicting deviant consumer behaviour is the perception of risk. Most consumer deviance goes undetected. Either the organisation doesn’t have the resources to detect and punish it, or it is very hard to detect (e.g. lying). The low perceptions of risk makes deterrence strategies that appeal to the severity of the punishment (“you’ll be fined $500 if you do X”) ineffective if the consumer doesn’t think they will get caught.

These insights suggest organisations should take a tailored approach to deterrence. Deterrence strategies need to move away from appealing to individuals to uphold the law, or stressing the severity of the punishment, and instead work to challenge the justifications commonly used to excuse consumer deviance.