Remote Purchase Environments: The Influence of Return Policy Leniency on Two-Stage Decision Processes

Abstract

The growth of catalog sales and the enormous potential of e-commerce elevates the importance of understanding remote purchase. Remote purchase environments differ from traditional bricks-and-mortar purchases in that the purchase decision is more likely to be framed as two separate decisions: consumers' decisions to order and, upon receipt, their decisions to keep or return the item. These two decisions are separated by a period of time, and crucial experiential information often is available only at the second decision point (i.e., after receipt). Consumers' initial lack of experiential information makes product choice more risky. Return policy leniency is one way to minimize the inherent consumer risk, but retailers may avoid instituting overtly lenient policies because they expect increased return rates. However, the endowment effect suggests some surprising benefits of return policy leniency to the retailer. Results from three experiments provide support for the idea that product ownership depends more on perception than possession.

Time Value of Commercial Product Returns

“…Wood (2001) found that more lenient policies tended to increase product returns, but that the increase in sales was sufficient to create a positive net sales effect. Other research has focused on the problem of setting returns policy between a manufacturer and a reseller and the use of incentives to control the returns flow (Padmanabhan and Png 1997, Pasternack 1985, Davis, Gerstner and Hagerty 1995, Tsay 2001.…”

The impact of the package opening process on product returns

“…The Moment of Receipt Product Itself (Anderson et al 2009b;Wood 2001) Delivery Package (current study):…”

Determinants of online buyer trust. A comparison with the auction system

“…En realidad, la garantía es un contrato explícito que refleja la solución a posibles contingencias futuras, como los fallos en el producto (Emons, 1988). La garantía reduce los riesgos inherentes a la compra a distancia, como en los contextos de venta directa y venta online (Tan, 1999;Wood, 2000;Wang et al, 2004). En la compra C2C por subasta, el ofrecimiento de una garantía depende del vendedor particular (por ejemplo, si ofrece una política de devolución o no) (www.eBay.es).…”