Can a Price Discount Backfire? Effects of the Juxtaposition of Add-On Fees and Price Discounts on Consumer Evaluations
Document Type
Article
Publication Title
Journal of Business Research
ISSN
1873-7978
Volume
172
DOI
10.1016/j.jbusres.2023.114430
First Page
1
Last Page
22
Publication Date
2-1-2024
Abstract
It is common to find add-on fees (e.g., convenience fee, resort fee, shipping fee) as well as a price discount in the same offer. This research examines the joint effects of add-on fees and price discounts and demonstrates that some price discounts may backfire. The rationale is that when a price discount is similar in magnitude to the add-on fee, it is likely to trigger attribution processes that make salient the negativity associated with the add-on fee. Initial studies show that the magnitude of the price discount matters in negatively impacting perceptions of add-on fee, and adversely impacts overall evaluations. Subsequent studies examine serial mediation effects and identify moderators of theoretical and practical interest. Across six studies, this research illustrates a novel and non-intuitive finding that the presence of a price discount alongside an add-on fee may negatively impact fairness evaluations and purchase intentions.
Recommended Citation
Burman, B.,
Verma, S.,
Guha, A.,
Srivastava, J.,
&
Biswas, A.
(2024).
Can a Price Discount Backfire? Effects of the Juxtaposition of Add-On Fees and Price Discounts on Consumer Evaluations.
Journal of Business Research, 172, 1–22.
DOI: 10.1016/j.jbusres.2023.114430
https://scholarlycommons.pacific.edu/esob-facarticles/360
