Why do discounts backfire when you make consumers wait?

October 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: Don't burn out: Enjoy your favorite products more by consuming them less frequently

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

Related Stories

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

March 5, 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

The culinary habits of the Stonehenge builders

October 13, 2015

A team of archaeologists at the University of York have revealed new insights into cuisine choices and eating habits at Durrington Walls – a Late Neolithic monument and settlement site thought to be the residence for the ...

Ancient genome from Africa sequenced for the first time

October 8, 2015

The first ancient human genome from Africa to be sequenced has revealed that a wave of migration back into Africa from Western Eurasia around 3,000 years ago was up to twice as significant as previously thought, and affected ...

Mexican site yields new details of sacrifice of Spaniards

October 9, 2015

It was one of the worst defeats in one of history's most dramatic conquests: Only a year after Hernan Cortes landed in Mexico, hundreds of people in a Spanish-led convey were captured, sacrificed and apparently eaten.


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.