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The paper seeks to examine cross‐cultural differences in how consumers evaluate “scratch and save” (SAS) promotions (which are characterized by uncertainty of savings outcomes) between Canada and Korea, where the promotion tool is widely used but the countries have different cultural values.

An experiment was conducted to examine cross‐cultural differences in SAS promotion evaluations between Canada (n=77) and Korea (n=78).

SAS promotions effectively stimulate favorable shopping intentions in Canada, a country with a low uncertainty avoidance culture, more so than in Korea, a country with a high uncertainty avoidance culture. However, subjects in Korea show consistently higher savings expectations from SAS promotions than subjects in Canada. Thus, the results report that consumers with the highest savings expectations do not necessarily have the highest intention to shop. In addition, in Korea, a SAS promotion with guaranteed minimum savings is found to be very effective due to reduced ambiguity about its outcome.

The study suggests cross‐cultural differences in the applicability of the disjunction effect.

The findings suggest that when SAS promotions are presented in a country with high uncertainty avoidance, retailers should explicitly indicate the value of the guaranteed minimum savings. By promising guaranteed savings, retailers can reduce consumers' relatively high concerns about unknown SAS outcomes, which results in a greater advantage in building favorable perceptions.

Very little work has been undertaken into SAS promotions and no known empirical research has been undertaken into cross‐cultural differences. This paper fills some of the gaps.

The purpose of this paper is to evaluate the interaction between inventory availability (scarcity) and pricing levels (price-leadership (PL)), and its effect on product returns in the internet retail supply chain. Specifically, this paper investigates how supply chain managers can use inventory (seller-induced scarcity) and pricing (PL) levers to control product returns.

Empirical data of sales and product returns from an internet retailer is analyzed to identify the scale of the effect that product scarcity and PL has on product returns. These factors are considered in developing a sales-return process model which is used with empirical data in a simulation study. The study evaluates changes in product returns for different policy settings related to PL and inventory levels. Findings of the simulation study are validated using statistical analysis of empirical data.

PL and seller-induced product scarcity affect the rate of product returns; however, the scale of this effect depends on inventory and pricing decisions. The results identify an inflection boundary based on scarcity and PL levels which reverses this effect. This reversal is explained by underlying principles at play regarding buyers’ valuation of the sale and corresponding product attributes.

Supply chain managers in internet retail can leverage lower inventory under the seller-induced scarcity approach to improve revenues. However, reducing inventory levels beyond a threshold is counterproductive, due to an associated increase in product returns. Similarly, setting market competitive prices (PL) can help reduce product returns. Under the seller-induced scarcity condition, this effect is reversed for inventory levels below a threshold. Retailers can implement the methodology developed in this paper to identify the inventory-price threshold that can help increase revenues while keeping the rate of product returns at a manageable level.

This research extends prior work regarding the role of product scarcity and pricing on product returns and develops a deeper understanding of how these factors can be managed to control product returns in the internet retail setting.

German food retailers face a saturated market that is characterized by a high competition environment, dominated by four big retailers. Discounters represent the most important retailing format and German food retailing is often characterized as being “cheap and cheerless.” Retailers offer low-price environments for their customers, because Germans are among the most price sensitive and price-oriented consumers across the world; as a consequence, margins are extremely low. On the other hand, German consumers have the longest tradition worldwide of behaving ecologically and being societally friendly. Being “green,” caring about the ecological footprint, the impact of their own behavior on others, has been for decades the mainstream rather than the exceptional case in Germany. This all leads to all German retailers struggling with the “contradiction” of very price-oriented customers that expect retailers to be sustainable in all possible ways. This chapter discusses how German food retailers respond to these requirements. It presents retailers’ corporate social responsibility (CSR) strategies and activities with regard to the CSR domains of environment, non-domestic operations, product, community support, employee support, and diversity. While all major German retailers have established a high number of CSR activities among all six domains, they often focus on measures that not only improve their CSR image, but also lead to cost reduction by improving efficiency (e.g., reducing energy cost, streamlining supply chains, or improving logistics).

In this paper, the authors explore the consequences of showrooming and price matching strategy to combat showrooming under the consideration that brick-and-mortar (BM) stores and online retailers hold different costs.

The authors use a duopoly model to analyze the impact of showrooming behavior on competition between a BM store and an online retailer with different types of customers and different costs. Then, they consider the price matching strategy that a BM store could employ to combat showrooming and explore the effect of such a strategy.

Showrooming behavior is detrimental to the profit of the BM store, and the online retailer suffers a loss of their profit unless the relative cost of the BM store is high and only part of the customers exhibit showrooming behavior. As the fraction of customers who seek price matching increases, profits of both the BM store and the online retailer initially decrease and then may increase, even if there is no showrooming.

Unlike existing studies that ignore different costs between online and offline retailers, the authors set different costs between the BM store and the online retailer to consider the effects of showrooming and price matching strategy.

Consumers use a variety of information cues to select products; price, however, is the most important. It is possible that the market environment can influence how price is viewed by consumers. The purpose of this study is to: establish validity and reliability for multidimensional aspects of the price construct; to explore how US and Korean students are different or similar in their perception of price cues; and to use countries’ retail environments to explore the differences. Findings of this study show that US subjects have higher levels of prestige sensitivity, price mavenism and value consciousness, than did Korean students. However, Koreans exhibited higher levels of sale proneness and price consciousness. Theoretical and managerial implications were suggested based on these findings.

Supplementary fees such as restocking fees, nonrefundable shipping and handling fees, and cancellation fees have become prevalent in the USA, and customers as well as the popular media have raised serious concerns about them. This paper aims to test whether such fees could benefit consumers because they lead to lower prices.

Transaction data that include prices and fees were collected from different service providers, including hotels, airlines, online retailers, and restaurants. The data were collected from different countries at different points in time. Cross‐sectional and panel data sets were used to test the relationship between fees and prices.

The empirical results indicate that on average higher fees lead to lower prices for the majority of customers who do not abuse customer‐friendly service policies. These findings are valid for different service industries in different countries even after controlling for unobserved heterogeneity using panel econometric models.

The results are consistent with the hypothesis that special fees are used to limit the abuse of customer‐friendly service policies, thus helping service providers to offer lower prices to the majority of customers who do not abuse these policies.

The purpose of this paper is to explore the mediating role of internal reference price (IRP) in a pay-what-you-want (PWYW) price setting. Specifically, it examines the effects of altruism, social desirability and price consciousness as the antecedents of IRP and consumers’ willingness to pay (WTP), future purchase intention and attitude toward the seller as the outcomes of IRP.

The data for the study were collected from 272 respondents through a structured survey and analyzed through structural equation modeling technique using AMOS 22.0.

Altruism and social desirability positively influence IRP whereas price consciousness influences IRP negatively. IRP mediates the effects of altruism, social desirability and price consciousness on WTP, future purchase intention and attitude toward the seller.

PWYW pricing strategy can help attract consumers with self-less characteristics or a desire to behave in a socially appropriate manner but not those who are highly price conscious as reflected by the differences in the way in which their IRPs influence their WTP, future purchase intention and attitude toward the seller.

This paper introduces a parsimonious framework to explain how three consumer characteristics influence consumers’ pricing decisions in PWYW context. The finding that the effects of antecedent variables on WTP, attitude and future purchase intention are mediated by IRP provides new insights that have not been explored earlier.

Despite retailers' growing use of lowest‐price refund policies, little is understood about how consumer satisfaction is influenced by them. This paper examines the potential role of market price volatility and store image on consumers' satisfaction of stores offering a lowest‐price refund.

Between‐subject experimental design is used in which subjects are presented with simulated shopping scenarios. In the shopping simulation lowest price refunds are provided to the subjects under different price volatility and store image conditions. Consumer satisfaction is then measured.

Results indicate that when market price volatility is high consumer satisfaction with lowest‐price refunds tends to be significantly higher for stores with a good image than stores with a poor image. As market price volatility increases, consumer perceptions of value increases for stores with a good image, while it declines for stores with a poor image.

The results of the study are limited by the simulated shopping methodology that is used and the absence of field shopping behavior and covariate satisfaction and refund data from retail stores.

Despite receiving the same outcome, different consumers' satisfaction with lowest‐price refunds may be highly influenced by the environment. Generally, both market price volatility and store image influence consumer satisfaction.

By identifying specific market conditions that influence consumer satisfaction with lowest‐price refunds, it may be critical for certain retailers to mobilize their refund programs.

Extant literature on pricing posits that consumers’ internal reference price (IRP) drives willingness to pay (WTP), when external pricing cues are available. This positive IRP-WTP relationship is further moderated by involvement and price consciousness. The purpose of this paper is to test how the IRP-WTP relationship will be moderated by involvement and price consciousness, albeit in the pay-what-you-want (PWYW) context. In the PWYW setting consumers can pay any amount of money (including nothing) and no external pricing cues are provided.

A survey was engaged to measure the key variables, and the data was analyzed using hierarchical multiple regression with spotlight analyses.

In the normal everyday pricing context, involvement strengthens the IRP-WTP relationship, while price consciousness weakens it. Contrary to this normal pricing wisdom, in the PWYW context, it was found that both involvement and price consciousness weaken the IRP-WTP relationship, thereby driving down consumers’ WTP.

Future studies should use experimental design to manipulate some of the independent variables used in the study, focus on the mediating processes that underlie PWYW decision-making and extend the findings in the context of wider demographics.

Managers should focus on segmentation, branding and product experiences to ensure higher returns of PWYW businesses.

This paper addresses lack of overall research in the PWYW area, and also addresses some key gaps left by extant research of Kim et al. (2009) that was published in the Journal of Marketing.