Red price? Red flag! Eye‐tracking reveals how one red price can hurt a retailer

Abstract Retailers present prices in red color to signal savings. Past research has shown that presenting all prices in red increases perceived savings from the store. However, in practice, retailers often present just one price in red in promotion materials with multiple prices. Will consumers perceive higher savings from the store even if only one price is presented in red? This research examines this prevalent retail practice using a theoretical lens. The theoretical framework predicts that two unique learned associations with red color (red: Savings and red: Stop) play a key role in shaping consumers' perception of savings from stores that highlight only one price in red. This research proposes and empirically demonstrates that consumers perceive lower savings from stores that present only one price in red. The theoretical framework is validated using a multi‐method approach that combines the strengths of behavioral and physiological (eye‐tracking) methods. Findings from this research suggest that presenting only one price in red lowers perceived savings from the store, which may hurt sales.