When Ethical Transgressions of Customers Have Beneficial Long-Term Effects in Retailing: An Empirical Investigation |
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| Affiliation: | 1. URPP Social Networks, University of Zurich, Andreasstrasse 15, CH-8050, Zürich, Switzerland;2. Jesse H. Jones Graduate School of Business, Rice University, 6100 Main Street, Houston, TX 77005-1892, United States;1. School of Business, Pacific Lutheran University, United States;2. Indian School of Business, Hyderabad, India;3. Olin Business School, Washington University in St. Louis, United States;1. Auburn University, Raymond J. Harbert College of Business, Department of Marketing, 405 W. Magnolia Ave., Auburn, AL 36849, United States;2. Virginia Commonwealth University, School of Business, Department of Supply Chain and Analytics, P.O. Box 844000, Richmond, VA 23284-4000, United States;3. Florida State University, The College of Business, Marketing Department, Rovetta Business Annex, Room 420, P.O. Box 3061110, Tallahassee, FL 32306-1110, United States;1. Iowa State University, College of Business, Department of Marketing, Ames, IA 50011-1350, United States;2. University of Georgia, Terry College of Business, Department of Management Information Systems, Athens, GA 30602, United States;1. Insper Education and Research Institute, R. Quatá, 300, São Paulo, Brazil;2. Jones Graduate School of Business — Rice University, 6100 Main Street (MS 531), Houston, TX 77005, United States;1. School of Advertising, Marketing and Public Relations, QUT Business School, Queensland University of Technology, 2 George St, 4000 QLD, Australia;2. School of Marketing, Australian School of Business, University of New South Wales, Sydney, 2052 NSW, Australia;3. Cass Business School, City University London, 106 Bunhill Row, London EC1Y 8TZ, UK;4. Department of Psychology, Schermerhorn Hall, Columbia University, 1190 Amsterdam Avenue, New York, NY 10027, USA |
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| Abstract: | ![]()
The conventional wisdom, grounded in deontological ethics, is that retailers should extinguish unethical customer behavior. However, there exists an opposing teleological view that unethical behavior may be tolerated if its ultimate consequences are beneficial for all stakeholders. This is supported by a survey of retail managers conducted by the authors that revealed over 80% of the respondents are inclined to tolerate unethical customers whose actions have beneficial effects. The primary goal of this research is to investigate the boundaries of this teleological perspective, that is, whether ethical transgressions that appear to have negative short-term consequences for the retailer and other ethical customers can have beneficial longer-term consequences for all parties. We examine this question empirically with a longitudinal dataset, covering seventy weeks and over 48,000 accounts, from a popular Swiss online retailer. We focus on increased revenues and customer engagement as the benefit for the retailer. Our results show that customers registering multiple accounts in violation of the retailer’s policy comprise fewer than 11.5% of accounts, yet generate more than 27.6% of the retailer’s revenue. Specifically, their behavior leads to higher retailer revenues and greater engagement by other customers in the long-run. We discuss the implications of this insight for retailing managers as well as scholars. |
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| Keywords: | Unethical customer behavior Marketing ethics Online shopping Ethical transgression Gamification |
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