Quick look
Iowa State researcher Minzhe Xu (above) is part of a team that recently set out to investigate a longstanding question among retailers: Is it better to show prices upfront or reveal them later in the buying process? Across various field studies and experiments, Xu and team discovered a consistent pattern. When prices aren't displayed, shoppers fill in the blank themselves - and their estimates are amplified by the beliefs they already hold regarding how expensive a store or product should be.
AMES, Iowa - Sometimes the price wasn't missing; its disclosure was just delayed.
That's what Minzhe Xu, assistant professor of marketing in Iowa State University's Ivy College of Business, and his fellow researchers noticed when shopping online. A growing number of retailers were asking shoppers to take one more step - add to cart, click to reveal, sign in to see price - before revealing an item's cost.
It felt like "a digital speed bump in a world that's more focused on frictionless shopping," Xu said.
But was there something bigger going on?
"Delays in disclosure can change how people think about the price," he said.
Could they also increase profits for retailers?
Hiding in plain sight
Retailers have long argued about whether prices should be shown immediately or revealed later in the buying process. A prominent idea, Xu said, is that transparency is good, while friction is bad.
But what if the delay wasn't just an annoyance? What if it changed what shoppers expected to pay?
To help answer these questions, Xu and the research team conducted a systematic empirical investigation into delayed price disclosures. An article outlining their findings, "Concealing Prices: How Delayed Price Disclosure Influences Consumer Purchase Decisions," was recently published in the Journal of Consumer Research and suggests hidden prices can have a significant impact on the outcome of a sale.
Across field tests and controlled experiments, Xu and team discovered a pattern: when shoppers already believe a product or store is expensive, showing the price later can actually help. The logic is surprisingly simple.
"Without a number in front of them, people fill in the blank themselves - and they tend to imagine something higher," Xu said. "When the real price finally appears and it's lower than what they had imagined, the product suddenly feels like a deal."
That's exactly what happened in a field test with the online store of Frávega, a major, mid-tier retailer of household appliances and technology productions in Argentina ("similar to Best Buy in the United States," Xu said). During a period of inflation topping 40 percent, the company temporarily concealed prices on various items - including espresso machines and kettles - and sales went up.
"Because of the economic environment, shoppers were already braced for the worst," Xu said. "So, when the actual prices appeared and were lower than shoppers had imagined they would be, it felt like a pleasant surprise or even a relief, and they were more likely to buy."
However, this effect flipped when shoppers were expecting a bargain.
In additional tests, Xu and team found that a delay in showing prices on sale items or products from budget retailers made shoppers imagine even lower numbers. And when the real price appeared - maybe still low, but not as low as they'd imagined - consumer interest dropped.
The power of price beliefs
Across six studies that were part of the investigation, Xu said a throughline was clear.
"Shoppers can develop expectations based on their price beliefs," he said.
Price beliefs are assumptions shaped by brand reputation, store environment, product category and economic climate. And when you remove the price, those beliefs tend to take over, Xu said.
"We found that delayed disclosure of prices didn't create different expectations, but instead amplified the influence of price beliefs people already had," he said.
Xu said the researchers also noted a finding specifically regarding the explanations given for delays in pricing disclosures.
"When retailers explain why a price is hidden - for example, saying a 'minimum advertised price' policy prevents them from showing the number - most shoppers assume the price must be low," Xu said. "This assumption ends up reducing their interest in making a purchase, even for premium items that would normally benefit from the delay."
In other words, being transparent about the reason for a delay can lead to a negative reaction from shoppers, regardless of what the price ultimately is when revealed.
Small design choices with big consequences
The research team's findings challenge the idea that retailers aiming to increase sales should always make shopping as easy as possible. In some cases, Xu said, adding a little friction to the process (like delaying the price) can even help.
"For some people, a little suspense about the price will lead to a pleasant surprise, but for others, it will feel more like a broken promise," Xu said.
The bottom line, he said, is that a "see price in cart" button isn't just a design choice - it can shape shoppers' expectations.
"The key is understanding your audience and knowing what consumers already believe when it comes to pricing," Xu said
