January 17, 2014
Over Time, Warning Labels Lead To Increased Purchases
Rebekah Eliason for redOrbit.com – Your Universe Online
Numerous products, such as cigarettes and medications, have elaborate warning labels that caution consumers about their risks. Most people would assume these warnings help lead people to make safer choices about the products.
Surprisingly, new research has discovered warning labels often have the opposite effect. According to Dr. Yael Steinhart of Tel Aviv University’s Recanati Business School, Professor Ziv Carmon of INSEAD in Singapore and Professor Yaacov Trope of New York University, if time elapses between product purchase and buying, consuming or evaluating the associated products, the presence of a warning label may encourage trust. This makes the potentially dangerous products seem less threatening.
"We showed that warnings may immediately increase concern and decrease consumption," said Dr. Steinhart. "But over time, they paradoxically promote trust in a product and consequently lead to more positive product evaluation and more actual purchases."
This discovery has significant implications for the regulators and managers of fields such as consumer products, healthcare and finance.
Professor Trope and Professor Nira Liberman of TAU’s School of Psychological Sciences developed “the construal-level theory” (CLT), which this study is based on. As people reflect on objects over time, the CLT suggests they often construe them abstractly and emphasize the “high-level” features while suppressing the “low-level features.”
Warning labels have a high-level feature by building trust and giving consumers the impression that all of the relevant information regarding the product has been presented. They also have a low-level feature by informing and making consumers aware of the negative side effects of the product.
According to the CLT, over long periods of time, consumers will de-emphasize the side effects and accentuate the feelings of trust from the warnings. This tendency may actually increase the purchase, consumption and assessment of the associated products.
In this study, the theory was tested using a series of experiments. For the first experiment, smokers were shown one of two ads, one with a health warning and one without, of an unfamiliar cigarette brand. Participants were separated into two groups. In the first group, people were told the cigarettes would arrive the following day. Those who had seen the warning showed an average decrease in cigarette purchases by 75 percent when compared to those who had not seen a warning. The second group was told the cigarettes would arrive in three months. The participants who had seen the warning increased their purchases by 493 percent when compared to those who were not shown the warning.
An additional experiment was conducted that presented ads to women for an artificial sweetener. Like the previous experiment they were either shown an ad with or without a health warning. If women were asked to order the sweetener immediately the warning was effective and decreased purchase of the sweetener an average of 94 percent. Women were then given the opportunity to buy the sweetener after two weeks and the amount of purchases increased by 265 percent.
Researchers suggest that consumer entities who want to minimize the deterrent effect of warnings should build in a purchase delay instead of hiding the warnings in fine print. On the contrary if the purpose is to genuinely inform customers about the risk of a product, they should repeat the warnings or ensure they are seen within a short time of purchase or consumption. This study was published in Psychological Science.