This study investigates how the perception of scarcity affects impulsive buying behavior in an online retail setting, with perceived competitive arousal acting as a mediator and financial literacy as a moderator. The study utilized an online experimental survey with 99 people to examine these connections. The findings indicate that perceived scarcity and perceived competitive stimulation have a notable influence on impulsive buying behavior. Financial Literacy did not influence the connection between competitive arousal and impulsive buying behavior. Consumers are more inclined to make impulsive purchases when they view a product as scarce and experience competitive arousal, according to the findings. The results have theoretical implications for comprehending consumer behavior in online retail environments and practical consequences for marketers aiming to utilize scarcity and competitive arousal in their promotional tactics.