An investigation into the timing of consumer requests for price‐matching refunds
| DOI | https://doi.org/10.1108/10610420510601067 |
| Pages | 197-205 |
| Published date | 01 May 2005 |
| Date | 01 May 2005 |
| Author | Monika Kukar‐Kinney |
| Subject Matter | Marketing |
Pricing strategy & practice
An investigation into the timing of consumer
requests for price-matching refunds
Monika Kukar-Kinney
Robins School of Business, University of Richmond, Richmond, Virginia, USA
Abstract
Purpose – The paper proposes investigating the timing of consumer requests for price-matching refunds, the relationship between the refund timing
and consumer repeat store purchase and the reasons for buying from the price-matching store when a lower competitive price is found before purchase.
Design/methodology/approach – In Study 1, qualitative research (consumer interviews) was conducted; Study 2 uses a shopping simulation in
which the timing of consumer refund-seeking behavior is observed, and Study 3 involves a consumer survey in which information on consumer refund-
seeking behavior at real stores is gathered.
Findings – The paper finds that consumers request price-matching refunds more frequently at the time of purchase than after the purchase. Seeking
(and receiving) the price-matching refund is associated with higher repeat store purchase behavior than not having had a refund-seeking experience.
Key reasons for buying from the price-matching retailer when a lower competitive price is found before purchase include convenience, tangible extras,
and store reputation/service quality.
Research limitations/implications – A student convenience sample was used. In Study 2, fictitious stores were used. In Study 3, the timing of refund
seeking may have been different on other (not reported) occasions. Ability to seek the refund was not accounted for.
Practical implications – The majority of the retailer’s price-matching cost will come from issuing at-the-time-of-purchase refunds, when consumers
possess more bargaining power. A positive refund-seeking experience may create a more loyal customer. In addition to being a low-price signal, price-
matching policies can serve as signs of retailers’ customer orientation.
Originality/value – This research fills the gap in understanding the consumer price-match refund-seeking behavior and offers practical implications
for retailers employing price-matching guarantees.
Keywords Pricing, Price positioning, Retailing, Refunds, Stores and supermarkets, Customer loyalty
Paper type Research paper
Introduction
Price-matching guarantees (PMGs) are offers in which the
retailer promises to meet or beat competitive prices
(Sivakumar and Weigand, 1996). Some retailers offer to
match or beat competitive prices at the time of purchase only
(e.g. Meijer, T Byrne Motorsports), while others are also
willing to do it for a specified period after the purchase (e.g.
Office Depot for 7 days, Circuit City for 30 days). While
competitive models of price-matching policies have been
investigated in the economics literature for a period of time
(e.g. Baye and Kovenock, 1994; Belton, 1987; Edlin and
Emch, 1999; Png and Hirshleifer, 1987; Shaffer and Zhang,
2000), the topic of consumer responses to PMGs has only
recently captured the attention of marketing and consumer
behavior researchers (e.g. Biswas et al., 2002; Chatterjee et al.,
2003; Jain and Srivastava, 2000; Kukar-Kinney and Walters,
2003; Srivastava and Lurie, 2001, 2004).
Based on signaling theory (Spence, 1974) and economics of
information theory (Stigler, 1961), consumer research on
PMGs focuses on examining the effects of price-matching
policies on consumer perceptions of the level of retail prices
(Chatterjee et al., 2003; Srivastava, 1999), the extent of
consumer pre-purchase search (Biswas et al., 2002; Srivastava
and Lurie, 2001), and store purchase behavior (Jain and
Srivastava, 2000; Kukar-Kinney and Walters, 2003). In line
with signaling theory, retailers can use the PMG policy as a
signal of low store prices. The rationale is based on the
premise that the cost of a PMG is higher for a relatively high-
priced retailer than for a low-priced retailer as more
consumers should be able to find lower competitive prices
and subsequently seek the refunds. Therefore, only low-
priced retailers should be willing to use PMGs. Because of
this cost difference of the PMG policy to the differently-
priced retailers, a PMG can serve as a low price signal. Thus,
The Emerald Research Register for this journal is available at
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The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
14/3 (2005) 197–205
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420510601067]
The author would like to thank Kent Monroe for his comments and help
with data collection, the two anonymous reviewers for their suggestions,
and the Center for Retailing at the Kelley School of Business, Indiana
University for funding the development of shopping simulation.
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