Latest / Marketing Psychology with Fexingo: Behavioral Triggers, Persuasion, and Consumer Behavior / The Peltzman Effect Why Safety Labels Backfire
Transcript
- Lucas: So there's this weird thing happening in food marketing right now. A study came out of the University of Chicago late last year — they looked at what happens when you put bold 'High Sugar' warning labels on snack packages. Luna: And I'm guessing the result wasn't that people put the snacks down. Lucas: Exactly opposite. Sales of the labeled snacks went up. Not by a little — by about 11 percent. And here's the kicker: people who bought them reported feeling less guilty afterward. The warning label almost acted like a permission slip. Luna: That is deeply frustrating if you're a public health marketer. But also… kind of fascinating from a behavioral standpoint. So what's driving this? Lucas: It's called the Peltzman Effect. Named after Sam Peltzman, an economist at the University of Chicago who first described it in 1975. He was looking at auto safety regulations — seatbelts, airbags, things like that. Luna: And his finding was that safer cars led to riskier driving. Lucas: Exactly. Peltzman's data showed that when drivers felt safer, they drove faster, followed less closely — they compensated for the safety feature by taking more risk. The net effect on highway fatalities was basically zero. Luna: So the warning label on a candy bar is functioning like a seatbelt. It makes you feel like you've been informed, so you can indulge without the usual guilt. Lucas: Right. And in the snack study, they actually tested three conditions: no label, a small text warning, and a large colorful warning. The larger, more alarming label produced the biggest sales increase. Luna: Which is the opposite of what the regulators presumably wanted. Lucas: Yeah. And you see this pattern in a lot of places. Think about fitness apps. You've got those 'Consult your physician before starting this program' disclaimers. For some users, that disclaimer actually makes the workout seem more legitimate, more intense — so they push harder than they would have without it. Luna: There was actually a study on that — I think it was from a few years ago, maybe 2022. Users who saw the injury disclaimer actually completed more reps and reported less pain afterward. The warning made them feel the program was effective. Lucas: That's a perfect example. The signal the marketer sends — 'this could hurt you' — gets reinterpreted as 'this must be working.' Risk compensation in the wild. Luna: So if you're a brand trying to be transparent, how do you avoid the Peltzman trap? Because the instinct is to put warnings everywhere. Lucas: Yeah, and that instinct is understandable. But the data suggests you have to reframe the warning as a benefit, not a barrier. So instead of 'High Sugar — may cause health issues,' you say 'Low Sugar — same great taste.' Luna: Reframe the safety itself as a feature. Lucas: Right. One bank I know tested this with overdraft fees. Instead of a warning that said 'You may be charged a fee,' they changed it to 'We'll alert you before any fee applies — opt in here.' The opt-in rate for alerts went way up, and overdraft incidents actually dropped. Luna: Because the positive framing made people feel in control rather than scared. Lucas: Yes. And control is really the key variable here. The Peltzman Effect kicks in when people feel they've been given information that allows them to make a calculated choice. The warning becomes part of the calculation, not a deterrent. Luna: So for marketers, the lesson might be: if you have to put a warning on something, pair it with a positive action the consumer can take. Don't just inform — guide. Lucas: Exactly. And that's actually a really good segue to something I wanted to mention. You know, conversations like this — where we dig into the real evidence behind marketing psychology — they take a lot of time to research and produce. And we keep this show ad-free because we think that makes the conversation more honest. Luna: Yeah, and we hear from listeners that they appreciate that. Some of them have even asked if there's a way to support the show directly. Lucas: There is. If these episodes have given you a useful framework or a specific stat you've actually used at work, you can support us at buy me a coffee dot com slash fexingo. That's all lowercase — buy me a coffee dot com slash fexingo. It's a small way to keep the show independent and ad-free. Luna: And it genuinely helps. Anyway — back to the Peltzman Effect. You mentioned guiding the consumer rather than just warning them. What does that look like in practice for a packaged food brand? Lucas: Great question. Let's take that snack study again. One thing they tested was a version of the label that said 'High Sugar' but also included a small QR code linking to a 'How to enjoy in moderation' page. That version didn't boost sales — it actually reduced them slightly. Luna: So giving people a constructive path forward actually worked. Lucas: It did. Because the warning alone triggers the compensation — 'I know it's bad, but I'm choosing it anyway, so I'm in control.' But when you add a resource that helps them manage the risk, the compensation goes away. They feel the brand is looking out for them. Luna: That's a really elegant finding. It means transparency alone isn't enough — you have to couple it with empowerment. Lucas: Exactly. And this applies beyond food. Think about any product that carries a stigma or a risk — alcohol, gambling apps, even certain financial products. The brands that do best are the ones that combine the warning with a tool: a spending limit, a time tracker, a pause button. Luna: So the Peltzman Effect is really a call to design better warnings, not fewer warnings. Lucas: Exactly. Because the warning itself isn't going away — regulators love them. But if you understand the psychology, you can turn a mandated label into a trust-building moment. Luna: One last thing — does the Peltzman Effect show up in B2B marketing? Like, are there safety warnings in software or industrial equipment that backfire? Lucas: It absolutely does. There's a famous case in enterprise software. A project management tool added a banner that said 'Warning: This action cannot be undone.' Users started clicking it more because they interpreted 'cannot be undone' as 'this is a powerful action.' The banner actually increased irreversible actions. Luna: So the fix would be to say 'This action is permanent — are you sure?' with a confirmation step. Lucas: Right. The confirmation step adds friction, which is the opposite of the Peltzman Effect. Friction forces the user to stop and think, rather than compensating with bravado. Luna: So the takeaway for marketers: warnings are signals, and signals get interpreted by the user's internal narrative. If you want the signal to work as intended, design the context around it. Lucas: That's a perfect summary. The Peltzman Effect reminds us that consumers are not passive recipients of information. They're active interpreters. And the same label that one person sees as a red flag, another sees as a green light. Luna: Which is why understanding the psychology behind the label matters as much as the label itself. Lucas: Exactly. And that's the kind of insight we try to bring every week. Thanks for listening — we'll be back next time with another deep dive.