The challenge of remanufactured products: the role of returns policy and channel structure to reduce consumers' perceived risk

Abstract

PurposeWhile remanufactured products represent an increasingly researched phenomenon in the literature, not much is known about consumers' understanding and acceptance of such products. This study explores this issue in the context of the theory of perceived risk (TPR), investigating return policy leniency and distribution channel choice as potential factors to foster remanufactured products' sales.Design/methodology/approachThis research utilizes an experimental design composed of a pre-test and a scenario-based main experiment to explore how return policy leniency might mitigate consumers' perceived risk and how their related purchase intention differs across two types of retail distribution channel structures (i.e. brick-and-mortar vs. online).FindingsThe investigation into the efficacy of return policy leniency within two retail distribution channel settings (i.e. brick-and-mortar vs. online) illustrates that providing a lenient return policy is an effective “cue” in increasing consumer purchase intention for remanufactured products. While prior literature has established that consumers value return policy leniency for new products, the authors provide empirical evidence that this preference also applies to remanufactured products. Notably, that return policy preference holds true in both channel settings (i.e. brick-and-mortar vs. online) under consideration. Additionally, and contrary to the authors’ predictions, consumers perceived remanufactured products sold via both channel settings as equally risky, thus highlighting that both are appropriate distribution channels for remanufactured products. Finally, while research on new products provides some initial guidance on consumer perceptions of quality and risk, the study provides empirical evidence into the difference of perceived risk with regard to new versus remanufactured products.Originality/valueBy employing the TPR, this research explored the role played by two supply chain management related factors (returns policy and channel structure) in reducing consumer's perceived risk and increasing purchase intention. In doing so, this study answers the call for more consumer-based supply chain management research in a controlled experimental research setting.

Influencing supply chain practice: the action principles approach applied to pandemic risk management

“…Returns policy, product replacement and customer outcomes A returns policy represents one of the key factors influencing a customer's purchasing proclivity (Janakiraman et al, 2016), perceived risk (Bonifield et al, 2010;Hjort et al, 2013;Confente et al, 2021) and rate of returns (Shang et al, 2019). Indeed, returns policy lenience, which refers to the level of convenience for a customer to complete a return (Abdulla et al, 2019), determines how customers evaluate the purchase of a product, and later, the ease of completing the returns process (Mollenkopf et al, 2007;Rao et al, 2018).…”

“…First, while the prior literature studied service recovery by focusing on the response of an associate interacting with the customer, it is not clear how the existing scales are relevant to service recovery in SCM processes (Khamitov et al, 2020), where dimensions such as speed and flexibility are likely to be interpreted differently (Peinkofer et al, 2022). Second, the increase in customer impatience (Daugherty et al, 2019) demands a customer-centric perspective of logistics and SCM (Esper et al, 2020) and calls for a more granular theoretical understanding of service recovery through PJT (Confente et al, 2021). For example, Gu and Ye (2014) studied interactional justice in service recovery, and Peinkofer et al (2022) focused on order fulfillment time and speed after a stockout.…”

“…The moderating effect of interactional justice A key element in service recovery is informing customers of the procedures and status of the process (Collie et al, 2000;Homburg and F€ urst, 2005;Confente et al, 2021). Specifically, the overall experience is influenced by how individuals perceive and process information communicated by the service provider (Peinkofer et al, 2022).…”

“…Indeed, it is unclear how existing constructs are related to service recovery in SCM processes, where dimensions such as speed and flexibility are likely to be interpreted differently (Peinkofer et al, 2022). In addition, the growing debate on a customer-centric perspective of logistics and SCM (Esper et al, 2020) calls for a granular theoretical understanding of service recovery through procedural justice theory (PJT) (Confente et al, 2021).…”

Factores de riesgo y beneficio percibidos en la intención de compra de consumidores de la movilidad colaborativa

“…En resumen, se discute que el riesgo percibido es un momento de incertidumbre que se puede presentar en el proceso de compra o posterior a la adquisición del producto. El consumidor evaluará los posibles resultados y consecuencias debido a que una decisión errónea incrementará el peso de la perdida (Confente et al, 2021;Joo et al, 2021).…”