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Beneficial Product Returns in Supply Chains

Author

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  • Meng Li
  • Yunchuan Liu

Abstract

Many retailers and manufacturers accept product returns from consumers (via money‐back guarantees) and retailers (via full‐credit return policies) respectively. While the extant literature focuses on either manufacturer or retailer return policies, this study investigates both return policies and finds that a manufacturer's return policy can induce the retailer to adopt a return policy. Although accepting consumer returns hurts the manufacturer when the manufacturer sells through non‐competing retailers, we find that the manufacturer is not destined to be hurt by accepting returns when selling to competing retailers that are differentiated in their returns rates.

Suggested Citation

  • Meng Li & Yunchuan Liu, 2021. "Beneficial Product Returns in Supply Chains," Production and Operations Management, Production and Operations Management Society, vol. 30(11), pages 3849-3855, November.
    • Handle: RePEc:bla:popmgt:v:30:y:2021:i:11:p:3849-3855
    DOI: 10.1111/poms.13519
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    References listed on IDEAS

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    Cited by:

    1. Yan Liu & Ningyuan Chen, 2022. "Dynamic Pricing with Money‐Back Guarantees," Production and Operations Management, Production and Operations Management Society, vol. 31(3), pages 941-962, March.
    2. Li, Dan & Chen, Jing & Chen, Bintong & Liao, Yi, 2022. "Manufacturer’s contract choice and retailer’s returns management strategy," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    3. Shen, Yinhai & Zhang, Qing & Zhang, Zhichao & Ma, Xinyu, 2022. "Omnichannel retailing return operations with consumer disappointment aversion," Operations Research Perspectives, Elsevier, vol. 9(C).
    4. Bingsheng Liu & Wenwen Zhu & Yinghua Shen & Yuan Chen & Tao Wang & Fengwen Chen & Maggie Wenjing Liu & Shi‐Hao Zhou, 2022. "A study about return policies in the presence of consumer social learning," Production and Operations Management, Production and Operations Management Society, vol. 31(6), pages 2571-2587, June.
    5. Guo, Xiongfei & Chen, Jing, 2023. "Manufacturer’s quality improvement and Retailer’s In-store service in the presence of customer returns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 177(C).
    6. Fan, Huirong & Khouja, Moutaz & Gao, Jie & Zhou, Jing, 2023. "Incorporating social learning into the optimal return and pricing decisions of online retailers," Omega, Elsevier, vol. 118(C).

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