The Impact Of Price Refund Guarantee Strategy On Consumers’ Regret

The recent decades witness the drastic growth of the Chinese market which hasbecome the target of many global enterprises; moreover the competition of retailers isskyrocketing as a result of this growth. Price guarantee, particularly low price guarantee isan effective way of promotion for retailers, the pledge of the purchase price leads toincrease the consumer confidence and helps to reduce the consumer perceived risk.Recently, the price refund guarantee strategy came into Chinese retail market forming abig question: Can this strategy reduce the consumer’s regret when they discover lowerprice and get compensation promised? Synthetic effects of past research focused on theprice refund strategy, but we can still find shortage in the analysis of the concretemanifestation of the strategy. This study tries to answer: according to different consumers(information-focus and protection-focus), how is the impact of Price Refund Guarantee(signal focus and refund depth) on consumers’regret?Based upon the literature review of related research on Price Refund Guarantee andregret from domestic and foreign scholars, the author explores four types of strategiesbased on Chinese retailer market: explicit lowest price guarantee+price matching refund,explicit lowest price guarantee+price beating refund, lowest price disclaimer+pricematching refund, lowest price disclaimer+price beating refund. According to the modelof decision and regret, the author also develops the model of Price Refund Guarantee andconsumers’ regret (choice regret, search regret) and study the regulation effect fromdifferent types of customers. The measure scales and model are justified through theexploratory factor analysis, reliability analysis, independent samples t-test and MANOVAtest by adopting experimental method with four scenarios.Our findings reveal that the choice regret on explicit lowest price guarantee plusprice-beating refund is lower as compared to the explicit lowest price guarantee plusprice-matching refund; the choice regret on lowest price disclaimer plus price-matching refund is lower as compared to the explicit lowest price guarantee plus price-matchingrefund. But there is no significant difference on the search regret among these fourstrategies. Regarding the information-focus customers, the author finds that the regret islower in the price-beating fund as compared to the price-matching refund, while nosignificant difference between the explicit lowest price guarantee and the lowest pricedisclaimer; regarding the protection-focus customers, no noteworthy difference in theregret explicit lowest price guarantee and lowest price disclaimer or between price-matching refund and price-beating refund. Eventually, the author proposes somesuggestions for retailers’ marketing practices based on the conclusions of Price RefundGuarantee.