Devaluation and awareness enhancement: The dual roles of live streaming and their impacts on return shipping insurance choice

Product returns are prevalent in e-commerce, and return shipping insurance (RSI) is commonly used to mitigate them. To enhance consumer awareness, sellers may engage suitable influencers for live streaming, which can reduce return rates and affect RSI decisions. However, live streaming involves pit fees and commissions and may foster a discount mentality, causing product devaluation. Despite these dual impacts, the interactions among influencer selection, pricing, live streaming conditions, and RSI choices remain underexplored. To address this gap, we make a contextual contribution by developing six standard analytical models to explore scenarios with and without live streaming under different RSI strategies: the seller bears the premium (Free RSI), the consumer bears the premium (For-a-Fee (Faf) RSI), or no RSI option is offered (No RSI). Our findings indicate that a seller’s willingness to open a live streaming channel depends on the pit fee, the devaluation level and RSI compensation. Notably, offering RSI encourages sellers to select lower-influence influencers, while the choice between Faf and Free RSIs does not affect influencer selection and the system’s deadweight loss (DWL) under a partial refund policy. Additionally, live streaming does not necessarily reduce product prices, nor does Free RSI consistently increase them in its presence. The decision to initiate live streaming may either encourage or discourage the seller’s willingness to offer RSI, depending on commission rates, product devaluation, and RSI premiums. Under the full refund policy, live streaming becomes less attractive to sellers, whereas their willingness to offer RSI increases. Unlike the partial refund policy, Free RSI notably weakens the preference for high-influence influencers and, when consumer trust is high, further reduces DWL compared with Faf RSI.