The Token-Effort Effect: Trivial Redemption Effort Increases Price Promotion Effectiveness

This research documents how introducing redemption tasks requiring a token (i.e., trivial) amount of effort—for instance, by asking the consumer to enter a promo code or solve a CAPTCHA to receive a discount—increases price promotion effectiveness compared with equivalent straight discounts (i.e., applied automatically). Eight studies (including two field experiments) and three additional Web Appendix studies provide robust evidence for the beneficial effect of token-effort requirements on redemption rates. This effect occurs because the easy-to-attain redemption task induces a high perceived return on effort. Thus, this effect only occurs when the redemption task requires token-type effort but not when it is effortful. This research offers costless and easy-to-implement managerial recommendations for boosting the promotional effectiveness of price promotions.