Looking a Gift Horse in the Mouth: The Dark Side of Uncertain Price Promotions

ABSTRACT A growing number of retailers and brands use uncertain price promotions to increase their sales. This research introduces the “looking a gift horse in the mouth” effect by probing these promotions as a potential liability. Findings from a field study and five experiments reveal that consumers who receive an inferior prize in an uncertain price promotion have a lower brand appraisal and repeated purchase behavior than those (i) who receive the same prize for sure, (ii) who receive the higher‐value prize in the uncertain promotion, and (iii) who are not even offered any price promotion. We propose, and examine, mixed emotions as a possible reason for this dilution in brand appraisal. The findings offer important insights and managerial implications for practitioners by proposing a revisit of the design of uncertain price promotions to regulate the mood and perception of risky low‐win consumers.