Exploring the link between payment schemes and customer fraud: a mental accounting perspective

Ina Garnefeld (), Andreas Eggert (), Markus Husemann-Kopetzky () and Eva Böhm ()
Additional contact information
Ina Garnefeld: University of Wuppertal
Andreas Eggert: University of Paderborn
Markus Husemann-Kopetzky: University of Paderborn
Eva Böhm: University of Paderborn

Journal of the Academy of Marketing Science, 2019, vol. 47, issue 4, No 4, 595-616

Abstract: Abstract Containing customer fraud has great economic relevance. This research proposes a fresh approach, derived from mental accounting theory and behavioral pricing research. Large-scale field data from more than 100,000 insurance customers and a follow-up experiment reveal that payment schemes influence customer fraud. Specifically, customers with annual payment schedules submit more rejected claims soon after their lump sum payments, and customers with monthly payment schedules exhibit greater customer fraud, in an effect that increases over time and decreases with greater category involvement. Customers who actively pay using money transfers submit about 40% more claims that get rejected than those who rely on more passive payment methods, such as autopay or direct debit. Marketing practitioners thus should reconsider frequent payment schedules and active payment options and monitor customer behavior after lump sum payments. For marketing research, this study opens a new research avenue, linking customer misbehavior and behavioral pricing research within a mental accounting framework.

Keywords: Customer fraud; Behavioral pricing; Payment scheme; Mental accounting (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s11747-019-00653-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joamsc:v:47:y:2019:i:4:d:10.1007_s11747-019-00653-x

Ordering information: This journal article can be ordered from
https://www.springer ... gement/journal/11747

DOI: 10.1007/s11747-019-00653-x

Access Statistics for this article

Journal of the Academy of Marketing Science is currently edited by John Hulland, Anne Hoekman and Mark Houston

More articles in Journal of the Academy of Marketing Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().