Buying Luxury Brands Online: The effect of money-back guarantee on perceived risk and purchase intention.

Muhammad Ashfaq, Yun Jiang, Abdul Waheed, Amir Zaib Abbasi

Abstract


The purpose of this study is to investigate the effectiveness of a money-back guarantee (MBG), quality label, and website quality on perceived risk and purchase intention based on the signaling theory. Primary data were collected using a convenience sampling technique and the online approach, where 210 responses were analyzed. Structural equation modeling (SEM) using SmartPLS 3/SPSS was applied to determine the correlation among the constructs and hypotheses testing. The findings confirm that MBG and quality label influence risk perception, which in turn, enhance purchase intention. Website quality has a positive effect on purchase intention, while website quality has a non-significant influence on risk perception. Perceived risk plays a mediating role in linking MBG, quality label, website quality, and purchase intention. Notably, we found that MBG is more useful and significant signal than a quality label and website quality in influencing buyers’ intention to purchase luxury brand online and reducing consumers’ risk perception. This research suggests that e-retailers can reduce consumers’ risk perception and increase purchase intention by offering MBG to luxury products.


Keywords


Luxury products; money-back guarantee (MBG); quality label; website quality; signaling theory.

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References


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