Be careful with late fees, because a small fine can make people late more

White-crowned Sparrow, a plate from John James Audubon's The Birds of America (1827-1838).

A small fee can turn a duty into a price.

The study. Two economists studied 10 day care centers in Haifa, Israel. Six centers added a small fine for parents who came late. Four centers did not change anything.

The finding. In the centers with the fine, late pick-ups almost doubled. When the fine was removed, late pick-ups did not go back down.

Why it matters. Before the fine, parents felt guilty about being late. The fine made lateness a service that they could buy. A small price removed the feeling of duty.

The takeaway. Before you add a fee or penalty, think about what it tells customers. A small fee can make a bad behavior feel acceptable.

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