The Real Deal: Return Policies against Review Manipulation

Ho, Yi‐Jen; Mao, Shengjun

doi:10.2139/ssrn.3897140

Cited by 1 publication

(3 citation statements)

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“…Merchants may release positive or negative fake reviews of their or competitors’ products for financial gain (Mayzlin et al., 2014), while platforms are inclined to manipulate reviews and add fake reviews to increase traffic and consumer engagement (Lee et al., 2018). To maximize their profits, platforms are even more willing to choose policies that encourage review manipulation (Chen, Ho, et al., 2022).…”

Section: Related Literaturementioning

confidence: 99%

“…To reduce fake reviews, practitioners and researchers technologically improve the detections of fake reviews and perfect mechanisms to economically reduce sellers' motivations to manipulate online reviews (Chen, Ho, et al, 2022). Some platforms propose pecuniary punishments to penalize sellers for excessive review manipulation (Wang et al, 2020), use purchase verification badges to confirm the identities of users who review products purchased from the platforms (Kokkodis et al, 2022), and design return policies to disincentivize sellers from review manipulations (Chen, Ho, et al, 2022). Some platforms also rigorously prohibit PCSs to reduce fake reviews, but fail to restrict them.…”

Section: Production and Operations Managementmentioning

confidence: 99%

“…Furthermore, they ignored the existence of strategic consumers and did not analyze how cashback strategies affected consumers’ return behaviors. Indeed, consumers returned purchases more often when products’ positive ratings were higher than their true ratings (Chen, Ho, et al., 2022; Minnema et al., 2016; Sahoo et al., 2018). However, the effect of cashback strategies on consumers’ return behaviors and return rates remains unknown.…”

Section: Related Literaturementioning

confidence: 99%

See 2 more Smart Citations

Impact of praise cashback strategy: Implications for consumers and e‐businesses

Ngai

2023

Production and Operations Management

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This study focuses on a broadly adopted but largely underexplored cashback strategy, the praise cashback strategy (PCS), which aims to entice consumers to keep purchases and post positive online reviews. The literature acknowledges the impact of cashback strategies on consumers’ purchase and review behaviors; however, it does not focus on how they affect consumers’ return behaviors. Moreover, there are few studies on the effect of cashback strategies on consumer surplus and social welfare in the presence of strategic consumers, especially in relation to analyzing the proportion of fake reviews. By incorporating consumers’ review and return behaviors into a newsvendor model, we establish a sequential procedure for merchants to determine pricing, inventory, and PCS decisions, and then examine the conditions under which merchants prefer to adopt a PCS and its impact. Our results reveal that the adoption of a PCS is a typical prisoner's dilemma for merchants in markets where PCSs are prevalent. Only when the PCS phenomenon is pervasive in the market, will merchants adopt a PCS with a small cashback amount. A PCS market negatively impacts consumer surplus and social welfare; however, merchants and consumers may benefit from a small cashback amount. Contrary to the common belief that a PCS undermines the organic evolution of online reviews and reduces return rates, we show that a PCS only elicits a few fake reviews, while merchants may face higher return rates from adopting it. These results benefit future studies on cashback strategies and fake reviews and provide evidence that supports the scientific governance of PCSs.

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Section: Related Literaturementioning

confidence: 99%