Why do Consumers Rescind Products/Purchases?
Why do consumers rescind (Editor: ~declare null and void) purchases they made?
Most developed countries have laws that protect consumers that enter contractual agreements by requiring a cooling-off period, i.e., a period in which consumers can rescind a product without any reason and without any further consequences.
But little is known about the psychology behind rescission. Sparks et al. (2014) did qualitative research to the reasons behind rescinding products. The authors found five fundamental concepts that lie behind rescission:
- PERSONAL CIRCUMSTANCES: these can range from divorce or marriage to illness, age and other priorities such as building a new kitchen. Those circumstances may have already been present at the time of the purchase. In that case, consumers use personal circumstances so as to feel exonerated from blame for their rescission. In most cases, however, personal circumstances have radically changed right after the purchase.
- INFLUENCE OF OTHERS: In some cases, the opinion of other influential people makes consumers to rescind a product or service. In most cases, these persons are family mambers or close friends that force the purchaser to rescind.
- FINANCIAL RE-ASSESSMENT: Another important reason for rescinding a product arises when consumers start to reexamine the financial value of their purchase and find out that the financial burden is higher than the financial benefits of the purchase.
- REFLECTION ON THE SALES PITCH: the fourth reason to rescind a product has to do with the sales presentation of the product or service. Exitement at sales presentation contributes to the decision of purchasing products or services. Once the consumers' excitement decreases as time passes by, they find out that the decision to buy the product had more to do with being overwhelmed by sales pressure than with the real desire to purchase the product.
- POST-PURCHASE PRODUCT PERCEPTIONS: During the cooling-off period, consumers start to assess other aspects of the products by reading online reflections, reading documents, or by contacting the company afterwards. This period often leads to consumers believing that the product is not as promising as was firstly thought.
These five concepts are important because they contribute to knowledge on consumer behavior. These insights can be used for marketing strategies with the goal of stimulating consumers to complete their purchase instead of rescinding it.
Source: Sparks, B.A., Bradley, G.L., Jennings, G.R. and N.R. Johnston (2014) "Cooling off and Backing out: Understanding Consumer Decisions to Rescind a Product Purchase" Journal of Business research Vol. 67 pp. 2903- 2910