The Effect of Different Post-Purchase Discount Formats on Consumers’ Perceptions of Loss and Willingness to Return the Product

This research is constructed by main study and supplementary study. In the main study, we determine to study the effect of different formats of post-purchase discount on two dependent measures: consumers’ perceptions of loss and willingness to return. Price promotion is one of the most commonly used methods to increase sales and revenue. If a promotion is announced before the purchase (i.e., pre-purchase discount), consumers are likely to perceive it as a benefit. If announced after the purchase (i.e., post-purchase discount), consumers tend to perceive the discount as a loss. Previous studies have stated that in pre-purchase discount condition, promotions change consumers’ purchase decisions, and consumers perceive different formats of discount. However, to our knowledge, the effect of different post-purchase discount formats has not been researched. Our research aims to fill this gap by proposing how consumers perceive the post-purchase discount, and whether they have different degrees of willingness to return the purchased product under various formats of post-purchase discount. We use a two-way ANOVA (2 Initial Prices x 2 Discount formats) to analyze subjects’ perceptions of loss and willingness to return. For marketing practitioners, we intend to suggest optimal promotion formats that alleviate consumers’ negative perceptions and prevent additional operating costs.