The Dark Side of Good Reputation and Loyalty in Online Retailing: When Trust Leads to Retaliation Through Price Unfairness

Abstract

This research examines price variations that are perceived to be unfair which then induce consumers to retaliate online. These phenomena are growing in online retailing given the data-based means for companies to set differential pricing, and the social media venues for consumer complaints. In this research, data from 997 respondents are used to test moderated mediation relationships integrating: (1) the influence of trust (i.e., competence and benevolence) on perceived price unfairness, and its mediating role on subsequent online revenge intentions; (2) the moderating role of (a) retailer reputation and (b) customer loyalty. We find that pricing practices seen as unfair can lead to a “dark side” or a “love becomes hate” effect for loyal customers of retailers with good reputations. Implications for theory and practice are discussed.