Seals on Retail Web Sites: A Signaling Theory Perspective on Third-Party Assurances

Abstract

Signaling theory provides the framework to address why third-party assurance (TPA) seals may not have the desired positive effect on consumer trust in online merchants. Based on identified antecedents of effective signaling, three research propositions are presented to explore 1) how reliably consumers are able to recall TPA seals on viewed retail websites, 2) how familiar consumers are with major TPA seals, and 3) how accurately consumers comprehend the assurances legitimately represented by the TPA seals. Results of this study of three major TPA seals (TRUSTe, BBBOnLine Reliability, and VeriSign) reveal that subjects have relatively poor notice and recall of TPA seals viewed on a website, have limited familiarity with TPA programs, and have incomplete and largely inaccurate understanding of the assurances represented by the TPA seals. These results suggest that TPA seals may not fulfill their potential to influence consumer trust in online merchants, because the signals are not effectively noticed or accurately interpreted by consumers.