The Role of Information, Rewards, and Convenience in Take-Back Programs for Clothing

Problem definition : Fashion retailers are increasingly implementing take-back programs to reduce textile waste and prevent used clothing from being landfilled. To increase participation, retailers must decide how much and what type of information to provide to consumers, how to collect the used clothing, and how much of a financial reward to offer. However, the effectiveness of different types of information, convenience, and reward levels on consumer participation is not well understood, and participation rates in take-back programs remain low. Methodology/results : We examine the effect of different information levels (i.e., none, generic, and different types of specific information) and convenience levels on the reward required by consumers to return their used clothing through four experiments involving over 5,200 subjects. Across all experiments, we find that providing generic information that collected items will be diverted from the landfill significantly decreases the reward required by consumers to return their used clothing. However, we find that providing information about a specific circular economy strategy does not necessarily help. When the collected clothing will be recycled (either as open-loop or as closed-loop), consumers’ required reward is not significantly different from when the clothing will just be diverted from the landfill. Moreover, we find that when collected clothing will be resold, consumers’ required reward is significantly higher. We show that the negative response to resale is due to the consumers’ aversion to the retailer explicitly profiting from the returned clothing. We also find that making the return process more convenient lowers the reward required by consumers. Managerial implications : Our results offer several managerial insights. We find that information can be an effective lever to increase consumers’ participation in take-back programs, but only if used judiciously. If a retailer intends to resell collected clothing, it may consider offering a higher reward or making the return process more convenient. Even though a more convenient return process may be more costly for the retailer, those additional costs may be offset by the lower reward required by the consumers.