IDEAS home Printed from https://ideas.repec.org/a/spr/elcore/v23y2023i4d10.1007_s10660-022-09638-5.html
   My bibliography  Save this article

Reducing ecommerce returns with return credits

Author

Listed:
  • Francisco J. Martínez-López

    (University of Granada, Campus Universitario de Cartuja
    EAE Business School)

  • Yangchun Li

    (Zhejiang University of Technology)

  • Changyuan Feng

    (University of Granada, Campus Universitario de Cartuja)

  • Huaming Liu

    (University of Granada, Campus Universitario de Cartuja)

  • David López-López

    (ESADE Business School)

Abstract

Massive ecommerce returns incur considerable costs for e-retailers, erode their competitiveness and make their product returns management complex and difficult. Reducing returns can help e-retailers mitigate these negative consequences. This article focuses on ecommerce returns due to satisfaction-related reasons, the most common reasons for ecommerce returns, and studied the use of return credits (a maximum free returns amount) to reduce these kinds of returns. This novel approach is different from full or partial return policy documented in existing literature. This article also studied the side effects of using return credits. A one-factor (credit amount: high vs. low) between-subject scenario experiment was conducted. ANOVA was used to test hypotheses. The results revealed that using return credits can significantly deter returns, while the high and low credit amount have a similar effect on deterring returns. Moreover, the high credit amount leads to weaker side effects than the low amount. These findings can help e-retailers decide whether to introduce return credits to manage returns, and help them design their return credits.

Suggested Citation

  • Francisco J. Martínez-López & Yangchun Li & Changyuan Feng & Huaming Liu & David López-López, 2023. "Reducing ecommerce returns with return credits," Electronic Commerce Research, Springer, vol. 23(4), pages 2011-2033, December.
  • Handle: RePEc:spr:elcore:v:23:y:2023:i:4:d:10.1007_s10660-022-09638-5
    DOI: 10.1007/s10660-022-09638-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10660-022-09638-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    File URL: https://libkey.io/10.1007/s10660-022-09638-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jing Chen & Bintong Chen, 2016. "Competing with customer returns policies," International Journal of Production Research, Taylor & Francis Journals, vol. 54(7), pages 2093-2107, April.
    2. Shao, Bingjia & Cheng, Zhendong & Wan, Lijuan & Yue, Jie, 2021. "The impact of cross border E-tailer's return policy on consumer's purchase intention," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    3. Jena, Sarat Kumar & Meena, Purushottam, 2022. "Shopping in the omnichannel supply chain under price competition and product return," Journal of Retailing and Consumer Services, Elsevier, vol. 65(C).
    4. Duong, Quang Huy & Zhou, Li & Meng, Meng & Nguyen, Truong Van & Ieromonachou, Petros & Nguyen, Duy Tiep, 2022. "Understanding product returns: A systematic literature review using machine learning and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 243(C).
    5. Janakiraman, Narayan & Syrdal, Holly A. & Freling, Ryan, 2016. "The Effect of Return Policy Leniency on Consumer Purchase and Return Decisions: A Meta-analytic Review," Journal of Retailing, Elsevier, vol. 92(2), pages 226-235.
    6. Pei, Zhi & Paswan, Audhesh & Yan, Ruiliang, 2014. "E-tailer׳s return policy, consumer׳s perception of return policy fairness and purchase intention," Journal of Retailing and Consumer Services, Elsevier, vol. 21(3), pages 249-257.
    7. Shin, Jae Ik & Chung, Ki Han & Oh, Jae Sin & Lee, Chang Won, 2013. "The effect of site quality on repurchase intention in Internet shopping through mediating variables: The case of university students in South Korea," International Journal of Information Management, Elsevier, vol. 33(3), pages 453-463.
    8. 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.
    9. Bonifield, Carolyn & Cole, Catherine & Schultz, Randall L., 2010. "Product returns on the Internet: A case of mixed signals?," Journal of Business Research, Elsevier, vol. 63(9-10), pages 1058-1065, September.
    10. James Andreoni & William Harbaugh & Lise Vesterlund, 2003. "The Carrot or the Stick: Rewards, Punishments, and Cooperation," American Economic Review, American Economic Association, vol. 93(3), pages 893-902, June.
    11. C Ranganathan & DongBack Seo & Yair Babad, 2006. "Switching behavior of mobile users: do users' relational investments and demographics matter?," European Journal of Information Systems, Taylor & Francis Journals, vol. 15(3), pages 269-276, June.
    12. Wang Xianghong, 2009. "Retail Return Policy, Endowment Effect, and Consumption Propensity: An Experimental Study," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 9(1), pages 1-29, September.
    13. Necati Ertekin, 2018. "Immediate and Long†Term Benefits of In†Store Return Experience," Production and Operations Management, Production and Operations Management Society, vol. 27(1), pages 121-142, January.
    14. Oghazi, Pejvak & Karlsson, Stefan & Hellström, Daniel & Hjort, Klas, 2018. "Online purchase return policy leniency and purchase decision: Mediating role of consumer trust," Journal of Retailing and Consumer Services, Elsevier, vol. 41(C), pages 190-200.
    15. Jaiswal, Anand K. & Niraj, Rakesh & Park, Chang Hee & Agarwal, Manoj K., 2018. "The effect of relationship and transactional characteristics on customer retention in emerging online markets," Journal of Business Research, Elsevier, vol. 92(C), pages 25-35.
    16. Difrancesco, Rita Maria & Huchzermeier, Arnd & Schröder, David, 2018. "Optimizing the return window for online fashion retailers with closed-loop refurbishment," Omega, Elsevier, vol. 78(C), pages 205-221.
    17. Mandal, Prasenjit & Basu, Preetam & Saha, Kushal, 2021. "Forays into omnichannel: An online retailer’s strategies for managing product returns," European Journal of Operational Research, Elsevier, vol. 292(2), pages 633-651.
    18. Thanh Tran & Haresh Gurnani & Ramarao Desiraju, 2018. "Optimal Design of Return Policies," Marketing Science, INFORMS, vol. 37(4), pages 649-667, August.
    19. Wan, Xing & Li, Dan & Chen, Jing & Lei, Yongqin, 2020. "Managing customer returns strategy with the option of selling returned products," International Journal of Production Economics, Elsevier, vol. 230(C).
    20. Dailey, Lynn C. & Ülkü, M. Ali, 2018. "Retailers beware: On denied product returns and consumer behavior," Journal of Business Research, Elsevier, vol. 86(C), pages 202-209.
    21. Elisabeth Deutskens & Ad Jong & Ko Ruyter & Martin Wetzels, 2006. "Comparing the generalizability of online and mail surveys in cross-national service quality research," Marketing Letters, Springer, vol. 17(2), pages 119-136, April.
    22. Jeffrey D. Shulman & Anne T. Coughlan & R. Canan Savaskan, 2010. "Optimal Reverse Channel Structure for Consumer Product Returns," Marketing Science, INFORMS, vol. 29(6), pages 1071-1085, 11-12.
    23. Björn Stöcker & Daniel Baier & Benedikt M. Brand, 2021. "New insights in online fashion retail returns from a customers’ perspective and their dynamics," Journal of Business Economics, Springer, vol. 91(8), pages 1149-1187, October.
    24. Fan, Huirong & Khouja, Moutaz & Zhou, Jing, 2022. "Design of win-win return policies for online retailers," European Journal of Operational Research, Elsevier, vol. 301(2), pages 675-693.
    25. Guangzhi Shang & Bikram P. Ghosh & Michael R. Galbreth, 2017. "Optimal Retail Return Policies with Wardrobing," Production and Operations Management, Production and Operations Management Society, vol. 26(7), pages 1315-1332, July.
    26. Jeffrey D. Shulman & Anne T. Coughlan & R. Canan Savaskan, 2011. "Managing Consumer Returns in a Competitive Environment," Management Science, INFORMS, vol. 57(2), pages 347-362, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. David Lopez-Lopez & Miquel Angel Plaza-Navas & Jose Torres-Pruñonosa & Luis F. Martinez, 2025. "Navigating the landscape of e-commerce: thematic clusters, intellectual turning points, and burst patterns in online reputation management," Electronic Commerce Research, Springer, vol. 25(1), pages 1-38, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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).
    2. Chen, Jing & Yu, Bo & Chen, Bintong & Liu, Zhuojun, 2023. "Lenient vs. stringent returns policies in the presence of fraudulent returns: The role of customers’ fairness perceptions," Omega, Elsevier, vol. 117(C).
    3. Khouja, Moutaz & Hammami, Ramzi, 2023. "Optimizing price, order quantity, and return policy in the presence of consumer opportunistic behavior for online retailers," European Journal of Operational Research, Elsevier, vol. 309(2), pages 683-703.
    4. 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.
    5. Duong, Quang Huy & Zhou, Li & Meng, Meng & Nguyen, Truong Van & Ieromonachou, Petros & Nguyen, Duy Tiep, 2022. "Understanding product returns: A systematic literature review using machine learning and bibliometric analysis," International Journal of Production Economics, Elsevier, vol. 243(C).
    6. Rokonuzzaman, Md & Iyer, Pramod & Harun, Ahasan, 2021. "Return policy, No joke: An investigation into the impact of a retailer's return policy on consumers' decision making," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    7. 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).
    8. Vineet Kaushik & Ashwani Kumar & Himanshu Gupta & Gaurav Dixit, 2022. "Modelling and prioritizing the factors for online apparel return using BWM approach," Electronic Commerce Research, Springer, vol. 22(3), pages 843-873, September.
    9. Xiao Huang & Dan Zhang, 2020. "Service Product Design and Consumer Refund Policies," Marketing Science, INFORMS, vol. 39(2), pages 366-381, March.
    10. Ratchford, Brian & Soysal, Gonca & Zentner, Alejandro & Gauri, Dinesh K., 2022. "Online and offline retailing: What we know and directions for future research," Journal of Retailing, Elsevier, vol. 98(1), pages 152-177.
    11. Urvashi Tandon & Amit Mittal & Sridhar Manohar, 2021. "Examining the impact of intangible product features and e-commerce institutional mechanics on consumer trust and repurchase intention," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(4), pages 945-964, December.
    12. Serravalle, Francesca & Vannucci, Virginia & Pantano, Eleonora, 2022. "“Take it or leave it?†: Evidence on cultural differences affecting return behaviour for Gen Z," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    13. Chang, Hsiu-Hua & Yang, Ting-Shan, 2022. "Consumer rights or unethical behaviors: Exploring the impacts of retailer return policies," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    14. Akturk, M. Serkan & Ketzenberg, Michael & Yıldız, Barış, 2021. "Managing consumer returns with technology-enabled countermeasures," Omega, Elsevier, vol. 102(C).
    15. Ülkü, M. Ali & Gürler, Ülkü, 2018. "The impact of abusing return policies: A newsvendor model with opportunistic consumers," International Journal of Production Economics, Elsevier, vol. 203(C), pages 124-133.
    16. Chen, Xiaohong & Tan, Lixia & Wang, Fuqiang, 2024. "Managing consumer bracketing purchases: Optimal return policy analysis," International Journal of Production Economics, Elsevier, vol. 275(C).
    17. Björn Stöcker & Daniel Baier & Benedikt M. Brand, 2021. "New insights in online fashion retail returns from a customers’ perspective and their dynamics," Journal of Business Economics, Springer, vol. 91(8), pages 1149-1187, October.
    18. Gianfranco Walsh & Michael Möhring, 2017. "Effectiveness of product return-prevention instruments: Empirical evidence," Electronic Markets, Springer;IIM University of St. Gallen, vol. 27(4), pages 341-350, November.
    19. Overstreet, Robert E. & Morgan, Tyler R. & Laczniak, Russell N. & Daugherty, Patricia J., 2022. "Stemming the tide of increasing retail returns: Implications of targeted returns policies," Journal of Business Research, Elsevier, vol. 151(C), pages 551-562.
    20. Mandal, Prasenjit & Basu, Preetam & Saha, Kushal, 2021. "Forays into omnichannel: An online retailer’s strategies for managing product returns," European Journal of Operational Research, Elsevier, vol. 292(2), pages 633-651.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:elcore:v:23:y:2023:i:4:d:10.1007_s10660-022-09638-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.