Consumer perceptions of ambiguous price promotions: scratch and save promotions versus tensile price claims

Purpose – The purpose of this paper is to examine how consumers respond differently to “scratch and save (SAS)” promotions versus “tensile price claims (TPC).” SAS promotions provide a possible discount (determined probabilistically) but conceal the exact amount until purchase. Tensile price claims (e.g. “up to 25 percent off on items marked with a red tag”) make imprecise price promotional claims. In addition to making indefinite price claims, SAS promotions (e.g. scratch and save up to 25 percent off) include gambling elements; the exact discount is determined randomly for individual consumers by a scratch-off card. Design/methodology/approach – Two experimental studies are conducted. Findings – Evidence from two experiments indicates that consumers perceive SAS promotions to be more ambiguous than tensile price claims. In addition, the results demonstrate consumer uncertainty towards SAS promotions but also consumer willingness to gamble: deep discount SAS promotions are perceived as more attractive than limited-scope tensile price claims. Practical implications – The findings suggest that consumers perceive SAS offers more enticing than limited tensile price claims as the proposed discount increases. Furthermore, establishing a minimum savings offer could be used to encourage consumers to shop at retailers offering SAS promotions. Originality/value – Limited work has focused on examining how consumers respond to SAS promotions because SAS promotions are a relatively new store-level promotional tool. Furthermore, no research effort has been extended to directly compare consumers’ perceptions of SAS promotions with tensile price claims.