Vouchers Cloud The Mind: Consumer’s Mental Accounting for Discounted Gift Vouchers
(A2019-9830)

AUTHORS

Gianluca Scheidegger, University of St.Gallen, Institute of Retail Management; Thomas Rudolph, University of St. Gallen, Institute of Retail Management; Marc Linzmajer, University of St. Gallen/ Institute of Retail Management; Severin Bischof, University of St.Gallen, Institute of Retail Management

KEYWORDS

pricing; promotions; mental accounting

ABSTRACT

Price promotions are a frequently used tool by companies to attract price-sensitive customers. In recent years, as consumers have more access to price information, they are becoming even more popular. While consumers profit from price war, companies’ bottom-line profits shrink. We build upon mental accounting research to introduce an effective alternative to regular price discounts strategies for price-sensitive industries: A discounted gift voucher (DGV). In an online experiment and two field studies, we show that DGVs lead to higher spending and an increased preference of the voucher-issuing company, even when the competitor offers the same product/service at a lower price.