Effectiveness of Sustainability Rating Scales in Dual‐Labeling: The Role of Eco‐Label Familiarity in Consumer Responses

ABSTRACT Eco‐labels and sustainability rating scales are widely used to communicate product sustainability, yet it remains unclear whether combining these signals enhances or undermines consumer responses. Drawing on signaling theory, this study examines how eco‐label familiarity and the presence of a sustainability rating scale jointly shape consumer trust, purchase intention, and willingness to pay, and whether sustainability label literacy moderates these effects. A 2 × 2 between‐subjects experiment conducted on coffee with 483 Canadian consumers reveals a significant interaction across all outcomes. When the eco‐label is highly familiar, adding a sustainability rating scale significantly reduces trust and produces lower purchase intention and willingness to pay, relative to presenting the eco‐label alone. Conversely, when the eco‐label is unfamiliar, the rating scale strengthens all three outcomes. Sustainability label literacy moderates the effect on willingness to pay only. The findings identify eco‐label familiarity as a critical boundary condition determining whether additional sustainability information creates value or causes dilution, demonstrating that sustainability communication effectiveness depends on informational sufficiency rather than accumulation. This highlights the strategic importance of aligning labeling complexity with consumer knowledge to optimize sustainability signaling and support effective business and consumption strategies.