Misbehavior or ‘Noblesse Oblige’?: Propensity to cheat after preferential customer treatment in loyalty programs

Abstract

This paper is centered around preferential treatment in loyalty programs, and how it affects the customers’ probability to engage in fraudulent behavior. Through an experimental survey this paper intended to provide evidence that belonging to a particular status group causes differences in the customers’ probability of engaging in fraudulent behavior. It was hypothesized that elevated status would cause the customers to either misbehave or lead to a phenomenon known as noblesse oblige. Although the current paper found no evidence for elevated status alone causing these differences, it provides evidence for the effect of elevated status on probability of engaging in fraudulent behavior being mediated by perceptions of superiority. Additionally, the current paper identifies the moderating role of potential gain (in this case; size of mistake) in the relationship between elevated status and probability of engaging in fraudulent behavior. The results imply that managers should focus on providing their gold or silver status customers with preferential treatment that makes the customer perceive themselves as more superior, as this seems to cause noblesse oblige effects.