A Serial Mediation of Deceptive Discount Advertising Effects in Online Retailing

Abstract

Deception in online advertising is not uncommon. An example of deceptive advertising, sometimes used by online retailers to drive traffic to their Web sites, is omission in discount advertising. It is a tactic in which an important condition for a discount on a product or service is (purposefully) excluded when advertised online—only to reveal the initially excluded condition to consumers once they have reached the retailer's Web site. The purpose of this study was to examine how such omission in discount advertising influences purchase intention, and to what extent this effect is mediated by perceived retailer ethics and attitude toward the online retailer. To test our hypotheses, we conducted an experiment ( N = 117) with a single-factor (omission in discount advertising: omission vs. control) between-subjects design. Perceived retailer ethics and attitude toward the online retailer were included as serial mediators. The results showed that omission in discount advertising negatively affected purchase intention. Furthermore, this effect was mediated by perceived retailer ethics and attitude toward the retailer, whereby participants who were exposed to the omission advertisement judged the retailer's ethics more negatively and consequently had a more negative attitude toward the retailer. This, indirectly, decreased purchase intention. This study provides evidence for a novel and parsimonious framework explaining the effect of omission in discount advertising on purchase intention, through perceived retailer ethics and attitude toward the online retailer, which is relevant for both theory and practice.

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