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How consumers value retailer's return policy leniency levers: An empirical investigation

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  • Huseyn Abdulla
  • James D. Abbey
  • Michael Ketzenberg

Abstract

Due to the ongoing and dramatic growth in the volume of consumer returns, retailers continue to struggle with the trade‐off in returns service strategies between implementing stricter return policies to lower operational costs and environmental footprint versus providing customers with lenient return policies to positively stimulate customers' value perceptions and patronage intentions. This paper argues that effective management of this trade‐off requires a deep understanding of the process through which consumers perceive, evaluate, and respond to return policies that vary in terms of leniency across five key dimensions identified in the literature: monetary, time, effort, scope, and exchange. To this end, we theorize on a cognitive process model and empirically test the model using randomized experiments with diverse consumer samples. By viewing each of the five leniency dimensions as returns service design levers, we examine (1) how a retailer's return policy leniency across different levers impacts a consumer's intention to purchase from a retailer, through the influence of leniency on the perceptions regarding returns service quality and transaction costs that jointly form perceived returns service value, and (2) how different leniency levers are compared in terms of their impacts. We find significant heterogeneity in the effectiveness of different leniency levers in influencing consumers' purchase intentions through increased perceived service quality, reduced perceived transaction costs, and subsequently increased perceived service value.

Suggested Citation

  • Huseyn Abdulla & James D. Abbey & Michael Ketzenberg, 2022. "How consumers value retailer's return policy leniency levers: An empirical investigation," Production and Operations Management, Production and Operations Management Society, vol. 31(4), pages 1719-1733, April.
  • Handle: RePEc:bla:popmgt:v:31:y:2022:i:4:p:1719-1733
    DOI: 10.1111/poms.13640
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    Cited by:

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    3. Rezaei Kalantary, Mina & Hejazi, Seyed Reza & Khosroshahi, Hossein, 2023. "Pricing for different return policies in an online marketplace considering appeasement during a post-return out-of-stock," International Journal of Production Economics, Elsevier, vol. 266(C).
    4. Chen, Hao-Wei, 2023. "Improving supply quality through the store-initiated returns in wholesale supply chains," International Journal of Production Economics, Elsevier, vol. 261(C).
    5. 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.
    6. Martínez-López, Francisco J. & Feng, Changyuan & Li, Yangchun & López-López, David, 2022. "Using instant refunds to improve online return experiences," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).

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