Not all seals are equal: An experimental investigation of the effect of third-party seals on purchase probability in electronic commerce

Abstract

Many online retailers display third-party seals on their website in order to signal their trustworthiness to potential customers. However, it is unclear whether and under what conditions such seals are effective in raising purchase probability. This article adds to the literature by testing and comparing the efficacy of two third-party seals. Both seals are common in the European electronic commerce market, but their dissemination differs vastly. Results from an online laboratory experiment with 300 subjects show that the two seals are not effective on average. However, this result is driven by the low-dissemination seal; its insignificant effect masks the high-dissemination seal's positive effect on purchase probability. Hence, evaluating third-party seals based on their average effect can be misleading. These results have important implications for electronic commerce research, consumer policy, online retailers, seal providers, and market analysts.