Product risk, or performance risk is defined as the probability of the item failing to meet the performance requirements originally intended [Peter and Tarpey 1975]. Product risk has been reported as the most frequently cited reason for not shopping online. For example, product risk was found to have significant impact on the frequency of purchasing online [Forsythe and Shi 2003]. A relatively high level of product risk is expected when being purchased online, particularly for some product categories, due to shoppers’ inability to physically examine and test product attributes online [Alreck and Settle 2002; Garbarino and Strahilevitz 2004], suggesting that risks associated with product uncertainty are likely to negatively affect online purchase intentions – at least for some products [c.f., Bhatnagar et al. 2000]. For instance, shoppers perceive a higher level of product risk for apparel when purchasing online as opposed to when purchasing in traditional stores [Goldsmith and Goldsmith 2002].
H1: Product risk is negatively associated with online shopping intentions.