When environmentally concerned customers object to your company's practices, change your ways, says Daniel Smith, owner of Daniel Smith Inc., a mail-order art-supply business in Seattle. Smith had been using high-quality Styrofoam peanuts to pack his wares because the damage rate was so low. When customers began to complain about the effect the material would have on the environment, however, he looked around for alternatives. "Finally," he says, "in January I risked it and changed over to recycled paper. And it's worked out fine."

Damage rates have remained negligible, and the net costs are about the same. Smith even garnered some goodwill by notifying his complaining customers of the switch.