Fairness perception of ancillary fees

Industry differences and communication strategies

Wujin Chu, Jeongmin Lee, Chris Baumann*, Christine Kang

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

This study examines fairness perception of ancillary fees across different industries, and ways to communicate ancillary fees in a way that reduces customers' feeling that they are being unfairly treated. Through surveys and consumer experiments, we show that consumers’ perception of fairness decreases as the level of ancillary fees increases, with differences across industries. Also, when the customer is given a cue that the ancillary fees are necessary for low base prices, fairness perception increases, explained by the “dual entitlement” concept. Another effective communication strategy is early disclosure, as opposed to late disclosure which decreases fairness perception and willingness to recommend.

Original languageEnglish
Article number102092
Number of pages11
JournalJournal of Retailing and Consumer Services
Volume55
DOIs
Publication statusPublished - 1 Jul 2020

Keywords

  • Ancillary fees
  • Dual entitlement
  • Partitioned pricing
  • Price fairness
  • Service design
  • Service industry

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