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In 1951, Taiwan faced a classic economic challenge: businesses weren't reporting sales and the government was losing tax revenue. I spent January working from Taiwan. I could see this is a challenge—they're late to adopt credit cards, so everything is in cash. This makes it way way easier to under report sales and skimp on taxes. And they did something that was bold and potentially very scammy at first: they turned every receipt into a potential lottery ticket.
Here's how it works: Every receipt in Taiwan comes with a unique 8-digit number.
Every two months, the government draws winning numbers. If your receipt matches, you win. Prizes range from NT$200 (about US$6) to NT$10 million (about US$310,000). In 2022, the system went digital with an app that automatically scans your receipts and notifies you of wins.
What happened? In the first year alone, reported sales tax revenue increased by 75%.
By 2019, nearly 70% of Taiwanese people were participating in the receipt lottery system.
Why did this work so well? It leverages three powerful behavioral economics principles:
Loss aversion: Customers who previously didn't care about receipts now saw skipping them as losing a lottery ticket. They had a lottery ticket that was theirs and the shop owners needed to give it to them.
Social pressure: When customers started demanding receipts, it became harder for businesses to hide sales. The government essentially recruited millions of citizens as informal tax auditors.
Immediate benefits: Lottery tickets are a fun immediate benefit for doing something that you may not be otherwise motivated to do. Also people tend to overweight the probability of winning when ticket sizes are small. This is because more people do win and you have a friend of a friend who has won. So you believe it's possible. Near misses also do this; if even one number is off, we think there's a chance!
The success of this approach hasn't gone unnoticed. In China, Alipay introduced a similar feature where users can win rewards by uploading their receipts. Brazil and several European countries have implemented their own versions. But the real opportunity here is for companies.
How your company can use these principles
So, how can you apply this to growth-hack your company?
Social pressure: In B2B settings, create mechanisms where end users organically pressure decision makers, similar to how Taiwanese consumers pressure businesses for receipts. This bottom-up adoption often proves more effective than traditional top-down sales.
Take Zoom and Figma. When employees want access to AI features in Zoom, they can request it directly from their admin. Figma goes even further—they show exactly which admins (hi Carl and Monique!) can approve your upgrade request. It's a lot harder to ignore a personal request than a generic upgrade prompt.
Loss aversion: Think about mental health services. Instead of saying "you could get mental health services," imagine saying "we're giving you three free sessions. You have them and if you don't use them, you lose them!"
Framing changes everything. Instead of saying "You can get a free flu shot," companies found success by saying "We've reserved a flu shot for you—don't let it go to waste." This taps into the same psychology as Taiwan's lottery: people hate losing something they feel they already have. By presenting benefits as pre-allocated resources rather than optional opportunities, insurance companies turned potential gains into potential losses.
At Irrational Labs, we've seen this work firsthand. When we tested this principle with Livongo, changing their welcome email from "Join Livongo" to "Claim your Livongo kit" increased open rates by 25% and click-through rates by 88%.
Making it work for you
Product teams often struggle with driving adoption of new features or encouraging desired behaviors. These three principles—social pressure, loss aversion, and immediate benefits—offer a powerful framework for tackling these challenges. The best part? They don't require massive technological investment. They just require understanding how people actually make decisions.
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Working on a behavior change challenge? At Irrational Labs, we help companies apply these behavioral principles to drive growth and engagement. Reach out at kristen@irrationallabs.com.
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