Price protection means refunding the difference when your price falls within a set window after a purchase. It answers Anderson and Simester’s experiment directly: the customers who stopped buying had just paid more than the new price.

Why it matters after a rise

A rise is often followed within weeks by the first sale at the new price. Customers who bought at full price just before it are your most recent, highest-paying customers, the group that punished the retailer hardest in the experiment Published. Protection turns that moment from a grievance into a reason to trust you.

Some large retailers already do this. Best Buy’s policy says that if it lowers its own price during the return and exchange period, “we will match our lower price, upon request” Reported.

Designing it

• Window. Match your return window, or 14 to 30 days. Long enough to cover the sale that usually follows a full-price order, short enough to cost little.
• How it’s paid. Store credit costs less and brings the customer back; a refund to the card is cleaner and builds more trust. Offer the refund if you can afford it.
• On request, or automatic. On request is cheaper and standard. Automatic, for subscribers and customers with several orders, is a stronger signal. At minimum, apply it without argument when asked.
• Exclusions. Few and printed. A policy full of exceptions reads as a trap.
• Say it before they need it, on the product page and in the order confirmation.

What it costs

Say a brand runs a 20% sale two weeks after a rise, and took 2,000 full-price orders averaging $50 in the 14 days before. If every one of those customers asked, protection would cost $20,000. Fewer will ask, and store credit gets spent with you. The other path is those buyers seeing the sale and ordering less for years, as the catalog customers did.

The customer who paid full price last week is the one your sale email should worry about.

Do this

• Write a price protection policy from the template in Appendix B, give support a macro, and add the line to your order confirmation before the first sale after your rise. For that sale, tell anyone who paid full price in the previous 14 days that the difference is theirs.