Why do discounts backfire when you make consumers wait?

Oct 15, 2013

Consumers like to reap the benefits of discounts immediately (not later), according to a new study in the Journal of Consumer Research. Consumers enjoy discounted products much less if they have to wait for them.

"Price promotions are common in the marketplace. For , these promotions translate into real economic savings, guide buying decisions, encourage trial of new , and make consumers feel smart and good about themselves," write authors Leonard Lee (Columbia University) and Claire I. Tsai (University of Toronto). But sometimes backfire, especially if consumers need to wait to enjoy the product.

The authors examined how discounts influence pleasure-related consumption experiences. They found that discounts generally make consumers happier. But they also found that paying a lower price for a product reduces the need to justify the expenditure, which causes people to pay less attention during consumption, dampening enjoyment. The relative strength of these opposing forces depends on when the product is consumed after payment—right away or after a delay.

The authors conducted four experiments involving real spending and consumption, using a variety of products (chocolates, music, orange juice) and different durations of delay. In one of the experiments, participants purchased one of two types of chocolate truffles at either the regular price of $1 or a discount of 50 cents. Half of the participants consumed the chocolate right away, and the other half waited for a week before consuming the chocolate. Consumers enjoyed the chocolate less when they had to wait a week.

"Our research provides new insight for better understanding the mixed effects of discounts on sales and loyalty, offering an explanation for why discounts may increase sales in the short run, but could have negative long-term effects on customer satisfaction and brand loyalty," the authors conclude.

Explore further: Researchers find a way of avoiding overhead aversion in charity donations

More information: Leonard Lee and Claire I. Tsai. "How Price Promotions Influence Postpurchase Consumption Experience over Time." Journal of Consumer Research: February 2014.

add to favorites email to friend print save as pdf

Related Stories

Is the iPad Creative? It depends on who's buying it

Mar 05, 2013

Encouraging consumers to feel ownership of products they haven't yet purchased can backfire because consumers tend to see themselves in the products they own, according to a new study in the Journal of Consumer Research.

Recommended for you

How people respond to a catastrophe on social media

7 hours ago

When an earthquake hits, it makes more than just seismic waves. Extreme events such as earthquakes, tsunamis, and terrorist attacks also produce waves of immediate online social interactions, in the form ...

Making cities more accessible for everyone

7 hours ago

Ron Buliung's interest in urban design initially started with his travels to Europe and India where he saw how different cities dealt with issues such as space, wealth, poverty, street life, congestion and ...

Scientists show IQs on the rise

8 hours ago

(Phys.org) —Human intelligence is thought to improve with each generation and a unique study of people born and raised in Aberdeen has proved that those in north-east Scotland are getting smarter.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.