خرده فروشان مراقب باشید: غیر قابل دسترس بودن بازپرداخت محصول و رفتار مصرف کننده Retailers beware: On denied product returns and consumer behavior

1. Introduction Product returns show no sign of declining and continue to hurt retailers’ bottom-lines. According to Appriss Retail (2017), about 10% of total sales in the US (more than $350 billion loss in sales – a number close to the estimated 2017 federal budget deficit) were returned. To help mitigate such overwhelming losses, however, sometimes retailers restrict consumer returns through the use of restrictive Return Policies (RPs). The existence of a wide continuum of restrictiveness of RPs in the marketplace inevitably complicates the process of returning the product for the consumers. On one end of the continuum are retailers who offer an unrestricted 100% satisfaction guaranteed RP (e.g., L.L. Bean). On the other end are retailers who deny product returns (e.g., Apple App Store). Many retailers fall in between these two extremes by offering for example, 30-, 60-, or 90-day return periods, “exchange only” policies, additional restrictions such as requiring a receipt and/or original packaging (Davis, Hagerty, & Gerstner, 1998). Beyond the variation between retailers’ RPs also exists variation within some retailers’ RPs. For example, Best Buy has a 30-day exchange or return on many of its products; however, some of its products have an “all sales are final” policy with no returns allowed. Furthermore, some retailers have varied their RPs over time with some becoming more restrictive (Petersen & Kumar, 2009). In addition to changing their RPs over time, some retailers regularly change their RPs throughout the year becoming more lenient during the holiday season. There is so much variation in RPs that a Consumer Reports (2010) article goes as far as to “warn” consumers to beware of retailer RPs because the “policies are a moving target.” Given the sheer amount of variability within and between retailers’ RPs, questions of critical importance include the following: Would a consumer who experiences a 30-day RP expect the same RP the next time he attempted a return? How would this consumer react when the second return is denied due to a variation within the RP in which the consumer was unaware? Very lenient RPs may negatively impact retailers’ profits due to a reduction in net sales as well as reverse logistics costs (Anderson, Hansen, & Simester, 2009); however, they positively impact gross sales by acting as a risk reliever for consumers, thus, increasing the likelihood of the initial consumer purchase (Lwin & Williams, 2006). In designing optimal RPs, a retailer must understand the impact that varying its RP may have on consumers. Moreover, retailers must understand specifically how the denial of a product return may impact consumer attitudes and future behaviors toward the retailer. There is a substantial amount of research that has been done on product returns which is outlined in Section 2. However, Petersen & Kumar (2009, p.35) stated, “The literature on product returns is sparse, especially in relation to analyzing individual customer product return behavior.” Despite the substantial financial impact of product returns on retailers, there is no research that we have identified that deals specifically with understanding consumer reactions to being denied a product return under various conditions. This paper aims to advance the RP literature by specifically addressing how consumers respond to having their product returns denied. What outcomes are likely when product returns are denied? What conditions elicit the harshest consumer reactions when returns are denied?