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Flexible return policies are offered by the manufacturers to encourage the retailers announcing a lenient returns scheme to their customers.

This study considers the distribution of durable products in a supply chain where the demand is sensitive to sales effort and retail price. Using a game theoretic framework, the paper presents an assessment of the strategic effect of flexible returns policy announced by the manufacturer under retail competition and highlights its implications on profitability.

Comparative analysis of monopolistic and duopolistic competition provides a better understanding about the repercussions and related facts on offering a flexible returns policy in these environments. It is profitable for the manufacturer to offer a flexible returns policy when there is retail competition than under monopolistic condition.

Practitioners view returns policy offered as an insurance given to the buyers and they infer it to be a better mechanism for doing business. Lenient returns policy promotes the sales by increasing the trust on the retailer and boosts up the perception of quality about the product by lowering the perceived risk for customers.

Effective product return strategies such as being lenient in terms of time, money, effort, scope and exchange can result in increased revenues, lower cost and improved profitability to the manufacturer and retailer, at the same time offering an enhanced level of customer service.

Return policies are major risk-allaying cues for customers, yet they are a critical cost/lost-sales for retailers. Despite their importance in the retailing industry, few studies have examined the interplay of return policies with other cues that customers use to make a purchase decision. Toward this end, this study aims to investigate the interaction effects certain salient high-scope and low-scope cues, such as consumer ratings and brand image, and retailers’ return policies have on consumer purchase decisions.

Building on literature from signaling theory and cue scope literature (high-scope and low-scope cues), the authors develop a research model that hypothesizes the interrelationships between return policies, price discounts, customer product ratings and brand image. Three experimental studies investigate the potential interplay between return policies (lenient vs stringent), price discounts (low vs high), customer product ratings (low vs high) and brand image (high vs low) on quality certainty perceptions and purchase intentions. The mediating effect of quality certainty perceptions on the interplay of various factors (return policy, price promotions, consumer ratings and brand image) and customer purchase intentions is also investigated.

Results indicate that a lenient return policy will have a positive effect when consumers encounter high scope cues that signal undesirable aspects of the product (i.e. low consumer ratings, low brand image). In contrast, when high scope cues signal desirable aspects of the product (i.e. high consumer ratings, high brand image), it attenuates the effects of return policy. The findings suggest that quality certainty acts as a psychological process.

Service researchers should seek to examine the role of return policies in a more comprehensive manner.

Return policies are important cues for consumers while making purchase decision. Thus, retailers need to realize that these policies may need to be more dynamic or tiered, rather than one-size-fits-all.

This study provides a more comprehensive view of how consumers consider multiple cues simultaneously in decision-making. Literature has mainly examined the interactions between different high-scope and low-scope cues, but there has been limited research directed toward the interplay between multiple high-scope cues.

While remanufactured products represent an increasingly researched phenomenon in the literature, not much is known about consumers' understanding and acceptance of such products. This study explores this issue in the context of the theory of perceived risk (TPR), investigating return policy leniency and distribution channel choice as potential factors to foster remanufactured products' sales.

This research utilizes an experimental design composed of a pre-test and a scenario-based main experiment to explore how return policy leniency might mitigate consumers' perceived risk and how their related purchase intention differs across two types of retail distribution channel structures (i.e. brick-and-mortar vs. online).

The investigation into the efficacy of return policy leniency within two retail distribution channel settings (i.e. brick-and-mortar vs. online) illustrates that providing a lenient return policy is an effective “cue” in increasing consumer purchase intention for remanufactured products. While prior literature has established that consumers value return policy leniency for new products, the authors provide empirical evidence that this preference also applies to remanufactured products. Notably, that return policy preference holds true in both channel settings (i.e. brick-and-mortar vs. online) under consideration. Additionally, and contrary to the authors’ predictions, consumers perceived remanufactured products sold via both channel settings as equally risky, thus highlighting that both are appropriate distribution channels for remanufactured products. Finally, while research on new products provides some initial guidance on consumer perceptions of quality and risk, the study provides empirical evidence into the difference of perceived risk with regard to new versus remanufactured products.

By employing the TPR, this research explored the role played by two supply chain management related factors (returns policy and channel structure) in reducing consumer's perceived risk and increasing purchase intention. In doing so, this study answers the call for more consumer-based supply chain management research in a controlled experimental research setting.

Given increasing customer expectations and disturbances to product returns management, capabilities such as supply chain resilience (SCR) can complement service recovery strategies in retail supply chains. This study utilizes procedural justice theory (PJT) to conceptualize service recovery resilience as a capability that allows firms to meet customer requirements when dealing with disruptions, and empirically investigates its impact on procedural and interactional justice and customer outcomes (i.e. satisfaction and loyalty) in the context of product replacement.

This research employs two scenario-based experiments using a sample of 368 customers to explore the outcomes associated with service recovery resilience.

The investigation shows more satisfied and loyal customers when a retail supply chain can overcome service recovery challenges through SCR. The study shows that customers evaluate not only the process itself, but also their interactions with the retailer. Specifically, procedural justice and interactional justice have a significant influence on these relationships.

This study proposes service recovery resilience as a concept that bridges service recovery theory with supply chain strategy in the unique context of product replacement. Further, this study also notes how information enhances customer satisfaction with the retailer's effort to address disturbances in the recovery process. Finally, this study informs managers on the capabilities needed to face new customers' needs.

The main purpose of this study is to increase the understanding of consumer behaviour with respect to (r)e‐tail borrowing, performed under different (more or less generous) delivery and return policies.

The study was designed as a randomised controlled experiment with a random sample strategy. Among the 192,482 Swedish customers who had made an order at nelly.com during the previous 12 months and were to receive the quarterly nelly.com newsletter in November 2010 by e‐mail, 4,000 were randomly selected and randomised into four groups of 1,000 in each group.

The experiment revealed certain purchase and return patterns that support the conclusion that (r)e‐tail borrowing behaviour exists in fashion e‐commerce. Evidence was also found that lenient delivery and returns policies seem to reinforce (r)e‐tail borrowing behaviour, albeit not always in expected ways.

Differences in delivery and return policies seem to impact consumer purchase and return behaviour differently depending on the type of item. Therefore a more differentiated view of how to apply them is suggested. Offering the same delivery and return policies to all types of customers and products is generally not optimal with respect to profitability.

The paper illustrates the need to consider both delivery and returns policies together with customer and product categories simultaneously when applying them in an e‐commerce context.

This paper investigate how fit uncertainty impacts product return costs in online retailing and how digital product fitting, a pre-sales fitting practice, can reduce fit uncertainty.

The paper analyzes the current performance of a retailer's e-commerce and return operations by estimating costs generated by product returns, including product handling costs, tied-up capital, inventory holding costs, transportation costs, and order-picking costs. The estimated costs were built on 2,229 return transactions from a Scandinavian fashion footwear retailer. A digital product fitting technology was tested with the retailer’s products and resulted in estimations on how such technology could affect product returns.

The cost of a return is approximately 17% of the prime cost. The major cost elements are product handling costs and transportation costs, which together amount to 72% of the total costs. If well calibrated, the fitting technology can cut fit-related return costs by up to 80%. The findings show how customers reacted to the fitting technology: it was unable to verify fit every time, but it serves as a useful and effective support tool for customers when placing orders.

Virtual fit verification using digital product fitting is key to retailers to reduce fit-related returns. Digital product fitting using three-dimensional scanning is more appropriate for some products, but it is unsuitable for products that are difficult to measure and scan.

The paper contributes an empirical estimate of retail supply chain costs associated with fit uncertainty, as well as theoretical understanding of the role of pre-sales fit verification in avoiding product returns.

In order to achieve competitive advantage over the physical marketplace, the e-retailers are insisted on endowing with lenient return policies. The piece-wise returns-and-reordering process incurs excessive buffering and unwanted logistics costs which raises overall fulfillment charges. The objective of this study is to re-design e-retail distribution policy by providing temporal storage at logistics service provides' (LSP) location. The impact of recurrent returns on pricing and profit margins are also investigated over time continuum.

A framework is developed to reduce the non-value added (NVA) storage and distribution efforts by providing collaborative buffering between LSP and e-retailer. The knapsack based buffering approach is tested and compared with traditional e-retail distribution practices. The revenue sharing concept is mathematically modelled and implemented in GAMS, which finally validated through multiple return scenarios.

The proposed model outperforms the existing one under all scenarios with different configuration settings of re-ordering, profit margins, and buffer time windows. The distribution cost is found, linearly related to the necessary product buffering space. The findings help to re-design sustainable return policies for individual products so that maximum customer value can be yield with minimum costs.

This study helps to determine the NVA efforts incurred while storing and delivering multi-time returned products to ensure desired service levels. The revenue sharing model provides pricing strategies for e-retail practitioners deciding which product should store in what quantity for how much time at the shipping agency location so that it fulfils the re-ordering at least waiting and sufficient buffering.

The proposed model extends the role of LPSs as temporary buffer providers to reduce returns-and-reordering fulfilment efforts in the e-retail network. This Collaborative framework offers an opportunity to amend the distribution contracts and policies time by time that enhances e-retailer's performance and customer satisfaction.

The purpose of this paper is to examine how return policies from online fashion retailers from different countries (USA, China and Western European) support consumer need for uncertainty avoidance and lower negative prefactual thinking in two different markets: China and USA.

A content analysis of eight international online fashion retailers’ return policies in both the China and USA markets was conducted.

US, Chinese and Western European online fashion retailers have more detailed return policies in the USA market compared to the China market. The results also indicate that US, Chinese and Western European online fashion retailers are more inclined to offer lenient return policies in the USA market which helps to lower consumer perceptions of uncertainty and negative prefactual thinking.

Exploring online retailers’ return policies and how retailers respond to consumers’ level of comfort with uncertainty and tendencies to engage in negative prefactual within the context of different cultural markets offer valuable insight into standard retail practices necessary to retain profitability. Despite the perception of a “global” marketplace, nonstandardization of customer service is found.

Although the ability of online retailers to reach global markets has increased, few scholars have studied return policies within different cultural contexts. This study focuses on return policy as a major influencer of prefactual thinking by reducing anticipated regret and increasing online purchase intention in a global cultural context. The research is not only beneficial to managers who seek to increase the profitability through globally strategic implementation of return policies but also contributes to the consumer regret and risk literature.

This paper aims to demonstrate how hospitality management research could benefit from the propositional style of theorizing, and how this approach could expand the scope of research in the discipline.

Developing new theories could provide unique insights and broaden the scope of research in hospitality management. To illustrate the power of proposition-based theorizing, this methodology is applied to the hotel cancellation policies domain.

Using the proposition-based theorizing in the context of cancellation policies, this study provides several propositions that could have broad implications for future research.

The contribution of this paper is threefold. First, the potential benefit of the proposition-based theorizing in the revenue management context of cancellation policies is demonstrated. Second, the theoretical frameworks and insights from the product return policy literature that could enrich future studies on hotel cancellation policies are introduced. Finally, this study conjectures on these theories’ relevance to hotel cancellation policies and consequently on their potential contribution to the scholarly discourse.

In spite of regular occurrence of product returns, research into determinants of returns services in retail businesses is still limited. To fill the gap, the purpose of this paper is to investigate critical determinants of customer to business type product returns services in the retail industry.

The authors develop a framework of product returns services that consists of three major service categories and 16 returns service determinants. The criticality of the determinants of product returns management are assessed employing the analytic hierarchy process (AHP) based multi-criteria decision-making approach. Under AHP set up the authors interview retail operations managers of major retail firms in Australia to identify critical determinants of product returns services.

Results indicate that the most important returns services dimensions are the way in which returns services are handled through interaction, and the outcome of service delivery. The top five critical service determinants of product returns are related to: communication support service for customer, money back for any type of returns, customer support access, user-friendly interaction, and product replacement.

The findings of the study can be considered by senior managers of retail firms as a reference guide for designing efficient and effective returns service systems and developing strategies for competitive advantage through product returns, namely, customer retention.