Dr. Chatterjee Discusses the Impact of Price Protection Policies

Dr. Patrali Chatterjee, Chair and Professor of Marketing at the Feliciano School of Business, was featured in WalletHub’s piece about the Best Credit Cards for Price Protection.

Retailers use price-match guarantees to compete by matching or beating competitors’ prices, which significantly influences consumer behavior. These guarantees enhance the perceived value of a retailer and can reduce consumers’ tendency to comparison shop, leading to increased purchase likelihood, especially when the policy is simple and easy to understand. Price-match guarantees serve as a heuristic for consumers, particularly those with low price sensitivity or high search costs, accelerating their purchase decisions. Conversely, when search costs are low, such guarantees may prompt more comparison shopping to validate the best deal.

Despite the advantages, the actual utilization of price protection guarantees by credit cardholders is minimal, prompting issuers to phase out these benefits in favor of more valued offerings. Automated apps like Earny and Sift have facilitated increased claim filings by tracking price drops and handling claims, impacting the traditional appeal of price protection. A report evaluating the price protection policies of the largest credit card issuers in the U.S. highlighted the detailed criteria used to assess the availability, coverage, claims process, and transparency of these benefits, reflecting the complexity and consumer expectations surrounding price protection policies.