Customer backlash against pandemic Surcharges: The mediating role of inferred negative motives and implications for the “Surcharge Economy”

Abstract

The services sector was adversely affected by the pandemic. Supply chain disruptions, staff shortages, and low customer traffic led revenues to decline. To offset these challenges, some businesses introduced pandemic surcharges, which were not well received by customers. The current work aimed to understand customer backlash against pandemic surcharges and test potential strategies to reduce negative reactions to such surcharges. Across three experiments, results offer evidence for a key mediator whereby surcharges increase perceived negative firm motives, which leads to lower purchase, return, and tipping intentions. Making the surcharge optional and justifying it based on lost business were ineffective in reducing negative response to the surcharge. However, explaining that the surcharge was needed to cover additional cleaning costs or buy safety equipment reduced inferred negative motives and consequently increased purchase and tipping intentions. Implications for a broader “surcharge economy” are discussed.