When Rights Cost More Than They Are Worth

An Analysis of the Gap Between Consumer Entitlement and Action

Question: If consumers recognise that they have been treated unfairly and believe they are entitled to a remedy, why do so many choose not to pursue it?

Abstract: This study investigates why consumers choose not to pursue valid refund claims and examines the influence of claim value, complaint costs and perceived likelihood of success on consumer decision making. A survey of 75 respondents from different age groups was conducted using hypothetical refund-dispute scenarios. The findings indicate that willingness to pursue a claim increases as claim value rises and decreases as the time and effort required to obtain a remedy increase. Respondents were also less likely to pursue claims when the perceived probability of success was low. Most significantly, although 96% of respondents believed that the consumer in the scenario deserved a refund, many were unwilling to pursue that refund when the non-monetary costs of claiming became sufficiently high. Findings suggest that the effectiveness of consumer protection depends not only on the existence of legal rights but also on the accessibility and efficiency of the mechanisms used to enforce them.

Implications: These findings have implications for consumer protection policy. If consumers abandon valid claims because complaint procedures are time-consuming or burdensome, the practical value of consumer rights may be reduced. Simplified grievances mechanisms and faster dispute-resolution systems may therefore increase the effectiveness of existing consumer protections.