Incentivizing Local and Eco-Friendly Milk Purchases: A Field Experiment

Growing environmental concerns necessitate shifts towards sustainable purchases, such as reusable packaging like glass milk bottles. However, A key barrier is the behavioral complexity requiring consumers to both purchase the product and return the packaging. We investigated whether financial incentives could foster habit formation using a 21-week field experiment with 6,735 co-op members of a grocery store randomized to Control, Purchase Incentive (PI), or Return Incentive (RI) groups for local, glass-bottled milk. Analyzing the scanner data and survey responses, we found that while both incentives significantly boosted sales during the 7-week intervention, these effects were temporary and did not translate into lasting purchase habits. Similarly, bottle returns increased modestly during the intervention but did not persist. Furthermore, contrary to expectations, the RI did not significantly outperform the PI in promoting bottle returns. Low incentive redemption, consumer default choices, and the inconvenience of returns emerged as potential obstacles. Our results suggest that temporary financial incentives alone, such as coupons, are insufficient to establish habits for multi-step sustainable behaviors. It is important to address structural barriers like convenience and underlying consumer preferences.