Consumer evaluations of price and promotional restrictions - A public policy perspective

The authors investigate the effect of price and promotional restrictions on consumer perceptions of deal value and show empirically how such evaluatio ns can be affected adversely when deal qualifications become excessively re strictive They examine the reasons for the pervasive use of restrictions by marketers to limit their offers, discuss the Federal Trade Commission guid elines that govern this practice, and develop a typology of deal restrictio ns. The authors also propose a framework explicating the mechanism by which consumers process restrictions in conjunction with varying deal sizes and test its salient hypotheses through afield experiment. Results show that co nsumers negatively evaluate restrictions that they view as causing excessiv e inconvenience, that they perceive as misleading, and/or that lock them in to binding commitments. In addition, such restrictive stipulations aggravat e consumers' evaluations even when paired with relatively attractive deal o ffers. Finally, the authors discuss several important public policy implica tions resulting from this study and illustrate with some recent examples.