Every autumn, a neighbor up the street sets out a couple hundred pumpkins, along with a metal cash box and placard reading, “Honor System: $5 for small pumpkins, $6 for large ones.” Inspired to learn more about whether selling things on the “honor system” really works, I came across an interesting little book called Honor System Marketing: Discovering Honesty, Trust, and Profit Amongst the Goodness of People, by Jeff McPherson. McPherson is an agriculture consultant and farmer who has been “honor system marketing”—that is, selling produce at unsupervised stands on the “honor system”—for decades. After travelling and meeting other honor marketers from across the US, he wrote this book about the advantages, pitfalls, and philosophy of honor marketing.

Apparently, honor system marketing (HSM) can have some financial benefits. Eliminating cashiers means eliminating a significant cost of running a market. And since markets operating on the honor system don’t need to be staffed, they can be left open around the clock, even on holidays. But there are other non-remunerative advantages, too, McPherson tells us.

One is that HSM forces us to be more trusting of others. According to McPherson, one of the biggest challenges of being an honor system marketer is resting easy at night, knowing that your market is exposed to theft. McPherson is certainly a practical man: he has no patience with thieves, and he takes proactive measures if he detects (or is tipped off about) shoplifting. He also urges would-be honor system marketers to keep in mind that theft occurs at staffed markets also, and that the savings on employee salary often is greater than the losses from any increased theft. But setting all that aside, McPherson estimates that only about 2% of his customers have ever stolen anything. Since in most HSM scenarios theft is surprisingly low, HSM tends to make us more trusting of our neighbors and complete strangers alike.

Much the same occurs on the other side of the transaction. Surprised customers tell McPherson that they enjoy feeling trusted enough to shop without supervision. However, McPherson does lose a certain percentage of customers to “paranoia”:

Even though they are totally honest, they are still a bit insecure about shopping where there is no attendant. They will avoid contact with situations that associate them with dishonesty.

And here we arrive at an important lesson about honor system marketing: that it assumes virtue in a society that assumes vice. Apparently, our society assumes vice to such a degree that some of us feel uncomfortable being trusted even when we are trustworthy. Why would that happen? Continue reading →