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The Impact of Web Assurance Seals on Consumer Trust

The Impact of Web Assurance Seals on Consumer Trust
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Author(s): Xiaorui Hu (Saint Louis University, USA), Guohua Wu (San Jose State University, USA), Yuhong Wu (William Paterson University, USA) and Han Zhang (Georgia Institute of Technology, USA)
Copyright: 2005
Pages: 3
Source title: Managing Modern Organizations Through Information Technology
Source Editor(s): Mehdi Khosrow-Pour (Information Resources Management Association, USA)
DOI: 10.4018/978-1-59140-822-2.ch112

Abstract

Electronic commerce (e-commerce) is growing rapidly despite the overall dismal economy in recent years (U.S. Census Bureau 2004). However, e-commerce still has some important hurdles to overcome in order to approach its full potential due to its higher perceived risks than traditional channels of distribution (Van Den Poel and Leunis 1999; Bhimani 1996; Ford and Baum 1997; Griffin, Ladd, and Whitehead 1997). Risks associated with e-commerce lead to serious trust concerns in electronic markets (Hoffman, Novak, and Peralta 1999; Ba, Whinston, and Zhang 2000). A survey conducted by Consumer WebWatch in 2002 provided statistical support for the concerns: only 29% of those surveyed said they generally trusted e-commerce sites, whereas about 64% said they did not (Consumer WebWatch 2002). Many sources advise online shoppers to do business with e-vendors that they know well (e.g. the first Internet tip offered by the Internet Fraud Watch is to “know who you’re dealing with.”1). Therefore, one of the most critical goals small companies must achieve in order to succeed in electronic markets is to effectively and efficiently induce consumers’ trust (Stewart 2003). One institutional cue that helps induce consumers’ initial trust is to display Web assurance seals on the e-vendors’ web sites that signal an e-vendor’s trustworthiness (Wang, Beatty, and Foxx, 2004). These seals are provided by independent third parties. When clicked, a seal would provide detailed disclosures explaining the principles/criteria ensured by the seal issuer. There are some recent researches on Web assurance seals (e.g., Noteberg, Christaanse, and Wallage 2003; Kovar, Burke, and Kovar 2000; Odom, Kumar, and Saunders 2002; Kimery and McCord 2002; Cook and Luo 2003; Wang, Beatty, and Foxx 2004). However, understanding of the seals is still limited. Besides, little research has been done to explore the effectiveness of different seal functions on consumers’ trust toward the e-vendors who display the seals. Most of the third-party Web assurance seals are to serve one or more of the three basic functions: (a) assuring transactional security, (b) ensuring consumers’ privacy, and (c) ensuring an e-vendor’s business transaction integrity (Kimery and McCord 2002). This research will examine the impact of the preceding seal functions on consumers’ trust toward an e-vendor that displays the seal(s). Hypothetical seals are used rather than real ones to isolate the effect of seal functions from the reputation of the seal providers. This proposed functional approach represents an initial step toward the understanding of the various main and interaction effects of the multi-dimensionalities of seals. The remainder of the paper is organized as follows. First, we review the existing literature related to trust and Web assurance seals. Then, the conceptual framework is presented and research methodology is described. We conclude with the discussion of our findings and suggestions for future research.

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