The purpose of this study is to present a theory that can resolve the conflicting hypotheses in existing literature regarding the interaction between product warranty conditions offered by firms and firm credibility. The two representative existing hypotheses make opposing claims: one posits that product warranty effects are absent when firm credibility is low and present when credibility is high, while the other argues the exact opposite. This study critically examines these hypotheses, identifies the problems of each, and conducts a comprehensive study applying an experimental method that addresses those problems. The research results found that the conflicting existing hypotheses are only partially true. Therefore, this study presents a new theory that comprehensively explains the interaction effects, thereby resolving the problems of the conflicting existing hypotheses. According to this theory, when firm credibility is low, the effect of product warranty conditions follows an inverted U-shaped pattern, while when credibility is high, it increases in a hockey-stick pattern. Practical implications and future research directions based on these findings are presented.