The “Fees->Savings” Link, Or Purchasing Fifty Pounds of Pasta

Leonard Lee, Columbia University, USA
Michael I. Norton, Harvard University, USA
In a series of studies, participants could purchase goods in stores which did or did not charge a fee. Though fees offer a financial boundary to purchase, they also create an illusion of a better deal. As a result, the presence of fees increased spending and overall store profitability. Furthermore, reminding people of previously paid membership fees led people to remember being more frequent customers. In sum, retailers not only earn revenue directly from the fee, indirectly from the fee’s positive influence on customer spending and loyalty.
[ to cite ]:
Leonard Lee and Michael I. Norton (2009) ,"The “Fees->Savings” Link, Or Purchasing Fifty Pounds of Pasta", in NA - Advances in Consumer Research Volume 36, eds. Ann L. McGill and Sharon Shavitt, Duluth, MN : Association for Consumer Research, Pages: 119-122.