This research builds on the signal theory to predict that an EDLP (Every Day Low Price) strategy will influence a consumer's perception of a low-price guarantee. The results of a study show that an EDLP retailer may offer a high refund because this will produce high credibility. However, a high refund offered without an EDLP will lead to lower credibility which, in turn, reduces the value and the consumer's buying intention.
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