When size doesn't matter: the impact of unexpected surcharges on consumer reactions

Daniel Chaein Lee, Jungkeun Kim, Jihoon Jhang, Jooyoung Park, Areum Cho and Jaehoon Lee

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Service firms increasingly use surcharges on complimentary items, yet little is known about how consumers respond to these charges. Across five studies in the restaurant context, we show that even nominal surcharges elicit negative consumer responses. Specifically, adding surcharges to complimentary items lowers engagement with advertisements. Furthermore, even a one-cent surcharge reduces perceived fairness and revisit intention. These effects arise because such surcharges violate communal norms, a type of relationship norm emphasizing genuine concern for others and acts of goodwill. By contrast, the negative effect disappears when exchange norms are activated, while it persists under communal norm activation. Together, these findings advance research on consumer responses to small surcharges on complimentary items and offer practical guidance on how service firms can communicate surcharges to mitigate negative reactions.

Keywords: complimentary items; partitioned pricing; price fairness; relationship norms; surcharge (search for similar items in EconPapers)
JEL-codes: J01 L81 R14 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2026-04-30
New Economics Papers: this item is included in nep-com and nep-reg
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Published in Journal of Business Research, 30, April, 2026, 208. ISSN: 0148-2963

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:137507

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