July 5, 2006, 12:00 AM

Web brother, can you spare a dime?

Newly launched Change Round-Up offers a free service for e-retailers that integrates into the checkout process and enables customers to donate money to charity.

Kurt Peters

Executive Editor

When checking out in stores, customers sometimes find a small jar in which they can deposit the change from their purchase, or more, that goes to a charity. Such change jars have proven successful for many charities as one of many methods to raise funds. What seems like a purely bricks-and-mortar concept now is being used by an online start-up that’s replicating the spare change concept for web retailers.

The just-launched Change Round-Up is a service free to e-retailers that integrates into their checkout process and enables customers to donate money to charity.

“There are many ways to donate to charities, but most of them require the donor to do some work-write and mail a check, go to a web site and enter credit card information, attend fundraisers, and so on,” says Daniel H. Quigley, president. “We wanted to make it easier to donate. Now online customers can donate spare change at a time that is most convenient for them.”

The system asks customers during an e-retailer’s checkout process if they would like to round up their purchase price to the nearest dollar and donate that amount to a charity. They then choose a charity-one or more selected by the e-retailer-from a dropdown list and the rounded-up amount automatically is calculated. At that point, customers are able to enter a larger donation if they choose. The transaction is completed as usual with the retailer collecting the full payment. Because the merchant collects the larger amount as part of the sale, the merchant pays the credit card discount rate on the entire amount of the transaction. Change Round-Up reimburses the merchants for the discount that they pay on the contributed portion.

The technological add-on to the online checkout process is a secure application program interface that takes the donated amount from the retailer’s finalized transaction and sends it to a secure, centralized database at Change Round-Up, which then sends funds to the selected charities. Change Round-Up does not charge credit cards or send bills to consumers.

The system is provided free to e-retailers, who typically do not profit from the transaction. Change Round-Up receives 10% of all donations for its operations. For companies uncertain of the benefits Change Round-Up says its system will produce, Change Round-Up will pay retailers to participate by giving 4% of total donations to the company and taking only 6%, as opposed to the full 10%, for itself.

Four e-retailers are preparing to launch Change Round-Up on their sites in the weeks ahead, the company says, and more are in the pipeline. The company declines to name the e-retailers and their chosen charities until the retailers debut the charity system later this month. As an example, though, it says one beach-oriented e-retailer has selected an environmental charity for its customers’ consideration.

This system is designed to benefit retailers at every turn, Quigley contends. “Benefits include: fostering customer loyalty because they see the e-retailer as ‘a good company’; generating positive publicity through PR campaigns and other means; and gaining greater insight into customers through Change Round-Up analytics functionality.”

Many retailers support charities because they care about their communities and want to be seen as good corporate citizens in the eyes of their customers, employees, vendors and investors, Quigley says. “We’re offering an easier and less expensive way for these companies to support and affiliate themselves with charities.”

 

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