Getting the most out of third party trust seals: An empirical analysis

•Randomized field experiments were used to collect a dataset of 288,169 shopping transactions from 493 online retailers.•Trust seals serve as partial substitutes for both shopper experience and seller’s sales volume.•Presence of too many (i.e., more than two) seals can lower the likelihood of purchase completion.•Trust seals are more effective for higher value shopping carts but only in the latter stages of the shopping cycle.

Electronic markets have successfully adopted third party trust seals as a self-regulatory mechanism to enhance consumer trust. While there exist many papers supporting the effectiveness of trust signals, interaction between trusts seals and contextual factors in e-commerce (e.g., value of shopping carts, number of trust seals displayed, shopper experience and retailer's sales volume) is an underexplored area. In this study, we exploit a dataset of over a quarter million of online transactions across 493 online retailers collected from randomized field experiments. A large trust seal provider conducted the experiments and subsequently shared the dataset with us. Our main contribution is the demonstration of four variables moderating the effectiveness of trust seals on the likelihood of purchase completion. More specifically, our work shows that trust seals are more effective for small online retailers and new shoppers, thus serving as partial substitutes for both shopper experience and seller's sales volume. Interestingly, we find that the presence of too many (i.e., more than two) seals can lower the likelihood of purchase completion. Our findings also show that trust seals are more effective for higher value shopping carts but only in the latter stages of the shopping cycle. Finally, we discuss the implications of our findings for online retailers, third party certifiers, as well as for policy makers.