Are Product Returns a Necessary Evil? Antecedents and Consequences

Abstract

The firm–customer exchange process consists of three key parts: (1) firm-initiated marketing communications, (2) customer buying behavior, and (3) customer product return behavior. To date, the literature in marketing has largely focused on how marketing communications affect customer buying behavior and, to some extent, how past buying behavior affects a firm's decisions to initiate future marketing communications. However, the literature on product returns is sparse, especially in relation to analyzing individual customer product return behavior. Although the magnitude of the value of product returns is known to be high ($100 billion per year), how it affects customer buying behavior is not known because of a lack of data availability and understanding of the role of product returns in the firm–customer exchange process. Given that product returns are considered a hassle for a firm's supply chain management and a drain on overall profitability, it is important to study product return behavior. Thus, the authors empirically demonstrate the role of product returns in the exchange process by determining the exchange process factors that help explain product return behavior and the consequences of product returns on future customer and firm behavior. In addition, the authors demonstrate that product returns are inevitable but by no means evil.

Exploring consumer orientation toward returns: unethical dimensions

“…The planned/unethical return orientation dimension reveals the irresponsible and reckless aspects of shopping behaviors evidenced by the relationship of planned/unethical return orientation and impulsive buying behavior. This finding supports recent studies in unethical and fraudulent return behaviors (Parks , Petersen & Kumar ).…”

“…, Harris , King et al . , Petersen & Kumar ) and retailers’ bottom line performance (Boyle et al . , CR Money , Parks ), as well as the upstream and downstream activities in the supply chain (Yu & Wang ).…”

Safety hazard and time to recall: The role of recall strategy, product defect type, and supply chain player in the U.S. toy industry

“…Regardless of the supply chain entity in the consumer goods industry that owns the brand, a defective product is generally returned by the customer to the point where it was originally purchased; that is in many instances, the retailer (Petersen and Kumar, 2009). Thus, the first step of the take‐back process, product acquisition, is performed by retailers.…”

Return Shipping Policies of Online Retailers: Normative Assumptions and the Long-Term Consequences of Fee and Free Returns

“…Wood (2001) suggests the value to retailers of lenient return policies, supporting the expectation that after customers have taken possession of the product they are also more likely to keep it. Furthermore, up to a given threshold, more returns result in an increase in repurchases (Petersen and Kumar 2009). Furthermore, up to a given threshold, more returns result in an increase in repurchases (Petersen and Kumar 2009).…”