Surcharges and Seller Reputation

We propose that consumers buying from low- (vs. high-) reputation sellers pay greater attention to surcharges. Thus, reputation moderates the effect of surcharges on purchase. Data from eBay show that consumers adjust bids to account for surcharges when buying from low-reputation sellers but not when buying from high-reputation sellers (study 1). Study 2 replicates this effect with partitioned versus consolidated prices. Study 3 reveals that consumers take longer to make purchasing decisions when buying from low-reputation sellers and that response times mediate the moderating role of reputation. Furthermore, the effect of surcharges levied by low-reputation sellers is attenuated for consumers with low (vs. high) need for cognition (study 4)