As a consumer, after making a large purchase it’s important to be confident in your final decision. Anxiety about a purchase can stem from many cognitive dissonances such as, making the decision to buy a current model versus waiting for a newer model, spending a large amount and not being able to pay it off, or purchasing something that others may not find acceptable. Buyer’s Remorse stems from this anxiety, is an unnecessary cause of stress that affects consumers negatively, and becomes an obstacle for marketers.
There are two phases of Buyer’s Remorse. The first phase is when the prospective buyer feels positive emotions towards a purchase. The desire in the product is coupled with a new heightened sense of possibilities. The second phase, after the purchase, is when negative aspects arise. The negativity is derived from associated opportunity costs and a reduction in purchasing power.
Buyer’s Remorse is a powerful experience for consumers, and marketing towards reducing Buyer’s Remorse may be the key to gaining repeat customers. Negative effects can be minimized by investing energy into the relationship after purchase, which can lower return rates and increase the likelihood of subsequent purchases. This can be accomplished easily with money back guarantees or including a cooling-off period where returns within a certain time period are acceptable. An all-sales-final contract almost always provokes anxiety.
While shopping for a large item purchase, the market environment plays into the theory of the paradox of choice. American Psychologist Barry Shwartz claims that when researching a purchase, and the number of choices reaches a certain threshold, going over that threshold will cause a significant amount of distress. Stepping over that threshold is when the second phase of Buyer’s Remorse happens.
As the number of choices increase, comparison is inevitable and regret rises while satisfaction decreases. A best practice in retail is to limit the number of choices available to the consumer.
The CEO of Costco, Craig Jelinek, was asked to reveal his secret to success. Jelinek stated that what keeps Costco members happy, even if they don’t know it, is having fewer choices. Buy ketchup at Costco and there is only one brand to choose from, leave happy. Buy ketchup from the grocery store, choose one of seven brands and leave questioning how the others might taste. Jelinek solved the problem to Shwartz’s theory by eliminating all options of choice.