The effect of guarantees on consumers’ evaluation of services

Recently, several service firms (e.g. Hampton Inn, Delta Dental Plan of Massachusetts) have successfully implemented service guarantees. Little research, however, has been done examining the conditions under which service guarantees are the most effective. The current research examines how the presence of a guarantee affects consumers’ pre‐purchase evaluations. It also investigates interactions between multiple extrinsic cues such as the presence of a guarantee and information about the quality level of firm offering the guarantee. The results suggest that while guarantees can enhance consumers’ perceptions of quality, especially in situations characterized by greater service quality variability, they are less effective in the presence of other quality cues.