On a practical note, what stops them getting a refund and repurchasing until they get it for free. Your other observation is good, too, but I think this senten

On a practical note, what stops them getting a refund and repurchasing until they get it for free. Your other observation is good, too, but I think this sentence gets to the heart of the problem. The double-or-nothing transaction is irreversible, which is what makes it a bad one. People like commercial transactions that can be reversed. Ideally, both parties should walk away feeling like they got a fine deal, but that if the deal goes sour at any point in the near future (because a part was broken; because the customer had second thoughts) they would be both be willing to "undo" it without much harm done.