A very low sale price can make the next offer less appealing, even to someone who bought during the earlier promotion, according to new research published in the Journal of Behavioral Decision Making.
The study by Tieyuan Guo of the University of Macau examines what happens after a large discount ends. Its findings concern stated purchase intentions in shopping scenarios, rather than measured sales at working shops.
That distinction matters for retailers. The research identifies a possible cost of a promotion, but it does not establish that deep discounts always lose money or permanently drive customers away.
Why the earlier price matters
The paper, first published on September 2, builds on a behaviour known as inaction inertia. This occurs when missing a very attractive deal makes someone less willing to accept a later, less attractive one.
Guo asked whether missing the deal was essential. Across three studies, a much lower previous price weakened later buying interest whether the scenario said the shopper had bought at that price or passed it up.
The result suggests that remembering the price difference can matter independently of regretting a missed opportunity. The author calls this broader pattern the postdiscount effect.
A drink purchase makes the comparison clear
The public study materials show how the idea was tested. In the first study, participants imagined shopping for a case of 12 drinks normally priced at $18.99. The current offer was $17.99.
Some were told that the previous offer had been $9.99. Others saw a much smaller earlier discount, $16.99. The scenarios also varied whether the shopper had bought a case on the earlier trip.
Participants then rated how likely they would be to buy at $17.99. They were told they had two or three bottles left at home, keeping remaining supplies the same across the scenarios.
Later studies used Chinese-language scenarios with prices in renminbi. They also asked about a reasonable selling price and anticipated regret, meaning regret someone expects to feel about a purchase.
The paper reports that an extremely low earlier price reduced perceived value and increased anticipated regret. These responses helped explain the lower purchase intentions.
An explanation changed the response
In the third study, an added explanation said the earlier discount resulted from an employee accidentally using a cheaper beverage’s price tag. The negative effect was weaker when participants received that explanation.
This is evidence that the context surrounding a price can influence its meaning. It is not a reason for shops to invent pricing mistakes or a test showing that any explanation will preserve demand.
Related questions arise in our earlier coverage of how describing a product’s remaining capacity changes perceived value. That research concerns product descriptions, whereas Guo’s study examines comparisons with an earlier price.
A promotion needs more than a sales tally
A separate 2018 study of 19,978 Groupon deals linked very deep discounts to lower sales during the offer itself. Its authors pointed to concerns about quality, supported by a follow-up laboratory experiment. That is a different explanation from reluctance to buy after an offer expires.
For a retailer evaluating a promotion, the practical question is what happens after the initial orders arrive. Useful measures would include repeat purchases, the price customers subsequently accept and profit after the discount’s cost.
Testing those outcomes against comparable products or customer groups would help establish whether the pattern appears in that business. Guo’s shopping scenarios cannot determine the best discount for a particular shop, or how long any effect would last.
