Many firms have begun rewarding their customers for engaging in positive WOM. While
prior research has shown that this practice can encourage WOM and be profitable, its impact on
listeners has not been investigated. In this paper, an experiment is used to evaluate the effect
that a firm’s WOM incentive program has on listeners. Results indicate that when a listener is
aware that a firm is rewarding its customers for engaging in WOM, they view such individuals
as having lower source trustworthiness and source altruism. Explicit disclosure of the incentive
improves trustworthiness as compared to not disclosing the incentive, but has no effect on
altruism. Further, source altruism is shown to be an important antecedent to WOM usage, the
extent to which listeners incorporate the WOM in their purchase decision. Implications of this
research for marketing researchers and practitioners are reviewed, as are limitations and
directions for future research.