The role of price-matching characteristics in influencing store loyalty

Abstract

Using a simulated shopping environment, the present research examines the effects of two characteristics of price-matching policies, the refund depth and the scope of the policy, on consumer store loyalty. The findings suggest that consumer responses differ with regards to the refund depth and scope. The refund scope positively affected store loyalty, with effects being the strongest for price conscious and skeptical consumers, while the refund depth exerted no influence on consumer behavior. The effects of refund depth were further explored using a scenario-based manipulation, but no depth effects on store loyalty were found. To stimulate store loyalty, retailers are advised to offer price-matching policies with wide scopes. Due to the lack of effects on store loyalty, the retailers should keep the refund depth restricted to matching the lower competitive price, as this would allow them to minimize the retail cost of offering the policy without negatively affecting store loyalty.