Relationship between retailers’ return policies and consumer ratings

Abstract

Purpose Return policies are major risk-allaying cues for customers, yet they are a critical cost/lost-sales for retailers. Despite their importance in the retailing industry, few studies have examined the interplay of return policies with other cues that customers use to make a purchase decision. Toward this end, this study aims to investigate the interaction effects certain salient high-scope and low-scope cues, such as consumer ratings and brand image, and retailers’ return policies have on consumer purchase decisions. Design/methodology/approach Building on literature from signaling theory and cue scope literature (high-scope and low-scope cues), the authors develop a research model that hypothesizes the interrelationships between return policies, price discounts, customer product ratings and brand image. Three experimental studies investigate the potential interplay between return policies (lenient vs stringent), price discounts (low vs high), customer product ratings (low vs high) and brand image (high vs low) on quality certainty perceptions and purchase intentions. The mediating effect of quality certainty perceptions on the interplay of various factors (return policy, price promotions, consumer ratings and brand image) and customer purchase intentions is also investigated. Findings Results indicate that a lenient return policy will have a positive effect when consumers encounter high scope cues that signal undesirable aspects of the product (i.e. low consumer ratings, low brand image). In contrast, when high scope cues signal desirable aspects of the product (i.e. high consumer ratings, high brand image), it attenuates the effects of return policy. The findings suggest that quality certainty acts as a psychological process. Research limitations/implications Service researchers should seek to examine the role of return policies in a more comprehensive manner. Practical implications Return policies are important cues for consumers while making purchase decision. Thus, retailers need to realize that these policies may need to be more dynamic or tiered, rather than one-size-fits-all. Originality/value This study provides a more comprehensive view of how consumers consider multiple cues simultaneously in decision-making. Literature has mainly examined the interactions between different high-scope and low-scope cues, but there has been limited research directed toward the interplay between multiple high-scope cues.

Customer Behavioral Reactions to Negative Experiences during the Product Return

“…In discussion, it is worth saying that one mistake in the form of a faulty return operation on the part of the company can contribute to the loss of customers and deteriorate reputation in the eyes of both current and potential customers. Companies must take care of the customer and guarantee him the most pro-consumer return policy [67]. Consumers may return a product for a variety of reasons, such as the product having the wrong color or size, having poor functionality, being damaged during shipment or simply prompting regret for an impulsive purchase.…”

Restoring the buyer–seller relationship through online return shipping: The role of return shipping method and return shipping fee

“…Academics have paid attention to the impacts of return policies and services on several consumer responses, such as purchase intention and decision (e.g., Rokonuzzaman et al, 2020;Shao et al, 2021;Abdulla et al, 2022), return or keep intention and behavior (e.g., Wood, 2001;Janakiraman and Ordóñez, 2012;Chang and Yang, 2022), buyer-seller relationships (e.g., Mollenkopf et al, 2007;Pham and Ahammad, 2017;Rintamäki et al, 2021), and post-return buying behavior (e.g., Griffis et al, 2012;Wang et al, 2020;Tandon et al, 2020). Janakiraman et al (2016) conducted a meta-analysis focusing on the effects of return policy leniency on consumer purchase and return decisions and found that leniency increases purchase more than returns.…”

Trust me if you can: The effect of driver username on passengers' intention to use ride‐sharing service

“…These studies suggest that a positive high‐scope cue establishes a context of trust in which the consumers are apt to pay attention to and believe the low‐scope cue (Akdeniz et al, 2013; Purohit & Srivastava, 2001). On the contrary, some researchers argue that a low‐scope cue has a greater impact on consumers' behavioral intention when the high‐scope cue has a negative valence because consumers prefer to seek out additional information to enhance their decision confidence in this circumstance (Hernandez et al, 2014; Rokonuzzaman et al, 2020). For example, Rokonuzzaman et al (2020) demonstrated that a lenient (vs. stringent) return policy positively affected consumers' purchase intention when high‐scope cues (e.g., brand image and consumer rating) exhibited undesirable aspects of the product.…”