Do Consumers Perceive Money-Back Guarantees as Believable? The Effects of Money-Back Guarantee Generosity, Store Name Familiarity, and Perceived Price

A money-back guarantee (MBG) is a service guarantee offered by a retailer. This research examined how MBG generosity, store name familiarity, and consumer perception of price interacted to influence MBG believability (the extent to which a consumer believes the MBG) and consumer store patronage. The results show that MBG generosity positively affected consumer patronage intentions by increasing MBG believability. When the perceived price was low, MBG generosity positively affected MBG believability for both well-known and lesser-known stores. When the perceived price was high, MBG generosity positively affected MBG believability only for well-known stores.