Abstract
Price discounts are a well-studied promotional method (e.g.,Hardesty and Bearden 2003). How discounts are offered has an influence on consumers’ deal perception (e.g., DelVecchio, Krishnan, and Smith 2007). Although various discount frames have been investigated, there remains a paucity of research on risky discounts. These are discounts that are determined by a chance procedure (e.g., ‘scratch & save” cards). Research on risky discounts is needed because they are actually offered and because they differ from other discount formats in at least one important respect: even after choosing a product, consumers do not know how much discount they will receive. Consumers receiving risky discounts are playing a gamble with an unknown outcome. To enhance our understanding of risky discounts we assess in three studies whether consumers prefer to get risky discounts per purchase or per item and why they prefer one discount format over the other. In fact, these options differ with regard to several respects (e.g., saving distribution) but they do not differ with regard to expected values.