When product scarcity backfires (or doesn’t): Limited quantities affect perceived retailer sincerity in online promotions

Limited quantity is prevalent in online promotions, where retailers set predetermined amounts of in-stock items to boost short-term sales through perceived scarcity. While prior studies suggest that demand-driven scarcity can elicit positive product evaluations, this research examines potential adverse effects of supply-driven scarcity on consumer perceptions of retailers, stemming from the granularity of limited quantities that deviate from consumer expectations. Four experiments and one field study demonstrate that less- (vs. more-) than-expected limited quantities undermine perceived retailer sincerity and, in turn, reduce purchase likelihood. This research contributes to the scarcity literature by revealing a novel scarce-insincere inference, an inferential leap beyond consumer product evaluations triggered by expectation disconfirmation. Two practical remedies are identified for retailers to mitigate these adverse effects: offering timely availability guarantees and employing external attribution framing.