Lost in Translation: Consumers Difficulty in Estimating Expiration Time With Redemption Caps

Richard Hanna, Boston College, USA
Scott Swain, Boston University, USA
S. Adam Brasel, Boston College, USA
Using redemption caps (e.g., good for the first 40 callers) is increasing in promotions, especially online. However, it is not clear how consumers interpret how much time they actually have to redeem with this type of restrictions, especially when the target market size is unknown. We propose that consumers anchor their estimates of market size and demand (i.e., response rate) from the stated redemption cap. The authors find that consumers, while believing demand grows with the cap size, overestimate how much time they have to redeem the offer and are more likely to lose out on the opportunity.
[ to cite ]:
Richard Hanna, Scott Swain, and S. Adam Brasel (2007) ,"Lost in Translation: Consumers Difficulty in Estimating Expiration Time With Redemption Caps", in NA - Advances in Consumer Research Volume 34, eds. Gavan Fitzsimons and Vicki Morwitz, Duluth, MN : Association for Consumer Research, Pages: 470-472.