In Research for academia, Work in progress

Promotional favors are an increasingly popular but seldom researched form of price promotion, where the receipt of the saving depends on an action by consumers that is unrelated to the content of the purchase—such as completing a questionnaire, making a referral, or transacting online. This paper is the first to show that the tactic can backfire, in the sense that consumers exposed to a promotional favor choose cheaper or fewer options—they spend less—than they do in response to a standard discount. We document this effect across five experiments. Study 1 is a field test. Studies 2 to 5 replicate the result in more controlled settings, trace it to a process of psychological reactance, and address the alternative that promotional favors are simply less appealing. Finally, we relate our work to three literatures in marketing research and offer practical advice to businesses.