Harm in price promotions: when coupons elicit reactance

Abstract

Purpose This research aims to demonstrate that coupons with short durations for redemption can backfire, lowering consumers’ attitudes toward the company. Design/methodology/approach Two experimental studies in the restaurant context demonstrate the backfire effect. A boundary condition of the effect as well as the underlying psychological process are identified. Findings Consumers respond adversely to coupons with restrictive requirements for redemption – in particular, a short duration. Study 1 indicates that while a short-duration (vs long-duration) coupon may backfire when its face value is low, this backfire effect is attenuated when the coupon’s face value is high. Furthermore, Studies 1 and 2 provide evidence that psychological reactance is the process underlying this backfire effect. Originality/value Consumers respond negatively to coupons with restrictive requirements for redemption because they perceive them as a company’s attempt to limit their freedom of choice. Companies should take measures, including careful target marketing, to avoid rousing this reaction from their consumers.