LAUSR

Despite cautionary advice against it, delighting consumers by offering them pleasant surprises is widely advocated. In this paper, using a low-price guarantee context, we show that retailers’ attempts to use surprise gains to delight consumers might lead to subpar outcomes, if a countervailing cognition such as suspicion of retailer opportunism dominates consumers’ thinking. In a low-price guarantee, retailers promise consumers refunds if consumers discover a lower price for a purchased product. We propose that providing a surprise component in the refund over and above the promised refund might boomerang, by increasing the likelihood of countervailing cognitions related to opportunistic signaling, in turn decreasing future purchase intentions. Over multiple studies, we provide evidence for this proposition, illustrate the underlying process, and identify boundary conditions.