The impact of order fulfillment information disclosure on consequences of deceptive counterfeits

Online retailers have exposed their consumers to an increase of deceptive counterfeit products provided by third-party marketplace sellers. Although leading online retailers commonly seek to enhance service transparency to consumers by providing fulfillment service information, such as inventory ownership (i.e., sold by) and order fulfillment (i.e., shipped by), their impact remains poorly understood, particularly in the context of when consumers receive deceptive counterfeit products. Drawing on signaling and attribution theory, we develop a series of six scenario-based experiments to explore the impact of fulfillment service options in combination with deceptive counterfeits on consumer perception of product quality, blame, trust erosion, and repurchase intention across three different retailing contexts. Our results highlight the efficacy of fulfillment service information as a signal set in setting a priori product quality perceptions for the small and predominantly online retailer. Further, we find that consumers follow the premise of causal schemata to attribute more blame to the entity responsible for selling the product when they receive a counterfeit product. Our results show that while there is a significant decrease in trust for a small retailer or startup this decrease does not significantly differ between the fulfillment service configurations. Furthermore, the erosion in trust does not negatively impact repurchase intentions. However, for the predominantly online retailer and omni-channel retailer trust erosion is higher when inventory ownership (i.e., sold by) and order fulfillment (i.e., shipped by) are associated with the online retailer than with a third-party seller and subsequently negatively impacts repurchase intentions.

Automated summary

Online retailers have increased consumers' exposure to deceptive counterfeit products. Fulfillment service information plays a significant role in shaping consumers' perception of product quality. Consumers tend to blame the entity responsible for selling the counterfeit product. Trust erosion does not significantly impact repurchase intentions for small retailers, but it negatively affects repurchase intentions for predominantly online and omni-channel retailers.