Buy Now, Pay Later Cost Disclosure and Consumer Payment Choice: Evidence from a Randomized Field Experiment in Retail Stores - Phase 2: Loyalty Bonus Disclosure for Immediate Payment

The intervention consists of a standardized verbal disclosure at the point of sale. On treatment days, sales staff are trained to inform each customer, before the payment method is finalized, that immediate full payment — by cash or by card without an installment plan — entitles the customer to a 15% loyalty bonus, whereas installment/BNPL payment does not. The listed price does not depend on the payment method; only the loyalty bonus is conditional on it. Staff are instructed to state the bonus terms neutrally and not to recommend either payment option.

2026-07-27

2026-08-23

Share of purchases paid in full immediately rather than via installment/BNPL payment.

The primary outcome is the proportion of completed transactions in which the customer pays the full purchase amount immediately rather than choosing an installment/BNPL plan. Immediate payment covers cash, card, and any other non-installment payment method; installment/BNPL payment covers BNPL products and equivalent installment-based options offered at the point of sale.

Construction

The outcome is constructed from transaction-level sales data. The following variables are recorded for each completed transaction:

Transaction ID: unique identifier of the purchase
Payment method: immediate payment vs. installment/BNPL payment
Store ID
Date: linking each transaction to its assigned experimental condition
Treatment/control status: assigned at the store-day level
Loyalty bonus indicator: whether the bonus was applied, where available
Product category and transaction value, where available

At the transaction level, the outcome is defined as Immediate = 1 if the transaction is paid in full immediately, and Immediate = 0 if it is paid via an installment/BNPL plan. The immediate-payment share is the number of immediate-payment transactions divided by the total number of completed transactions, and can be computed by day, store, or experimental condition.

Interpretation

A statistically significant increase in the immediate-payment share on treatment days relative to control days would be interpreted as evidence that a loyalty bonus for immediate payment shifts consumers' payment choices away from installment/BNPL plans.

Secondary outcomes include:

Average transaction value
Total sales volume
Number of completed transactions
Product category composition and product shifts
Conversion rate, if customer traffic or store-visit data are available
Returns, if available
Loyalty bonus accrual and redemption, where available

Overview
This study is a randomized controlled field experiment evaluating whether a loyalty bonus for immediate payment, disclosed at the point of sale, affects customer payment choice and purchasing behavior in a retail setting. It is the second phase of the experiment registered under AEARCTR-0018591 and is conducted over four weeks in the same three retail stores.

Control Condition
In the control store and control time blocks, standard pricing communication remains in place, and no payment-method-contingent loyalty bonus is offered or disclosed.

Baseline Period
Data collected before the start of Phase 2, prior to July 20, 2026 - including data from Phase 1 (AEARCTR-0018591) - are used to assess baseline comparability across stores and to support the difference-in-differences analysis.

Unit of Analysis
The unit of analysis is the individual transaction.

External Validity
The study is conducted in a small number of comparable retail stores within one geographic area. Given the limited sample of stores and the specific retail context, external validity will be interpreted cautiously. The main objective of this phase is to obtain internally valid evidence on whether a loyalty bonus for immediate payment affects payment choice and purchasing behavior in the participating stores.
The study will be conducted in the same three retail stores as Phase 1.
The primary unit of observation is the individual transaction, and the realized number of transaction-level observations will be reported after data collection for the July 20 - August 20, 2026 study period.

Not available

Lottery

Retail stores

Yes

3 stores total. All three stores follow a within-store design: in each store, 28 full business days over the four-week period from July 27, 2026 to August 23, 2026 are randomly assigned to treatment or control, stratified by day of the week and split 50/50 between the two conditions. This yields 84 store-day clusters in total.

3 retail stores

3 retail stores; 84 store-day clusters in total, of which 42 are treatment days and 42 are control days (14 of each per store); approximately 1,200 completed transaction-level observations over the four-week period, with roughly 600 transactions per arm, subject to realized sales.