 Pricing and return strategy of online retailers based on return insuranceMinglun Ren, Jiqiong Liu, Shuai Feng and Aifeng Yang Journal of Retailing and Consumer Services, 2021, vol. 59, issue C Abstract: With the development of e-commerce, online shopping has become increasingly common, and as a result, consumers inevitably encounter the problem of returns. Therefore, pricing, return policy and return insurance strategy have attracted considerable research attention. In this paper, we construct four models to study pricing, return policy and return insurance strategy. We show that when a product's net residual value is greater than or equal to zero, online retailers should offer a money-back guarantee (MBG) return policy; however, they do not have to offer free return insurance because the latter does not increase their market share and profit, nor does it increase consumer surplus. The optimal strategy of insurance providers is unaffected by whether the policyholder is an online retailer or a consumer and should be neutral, which helps insurance providers gain the trust of policyholders. Consumers should buy products only when online retailers offer an MBG return policy; however, consumers should not do so if the online retailer provides free return insurance. Keywords: Return insurance; Return strategy; Product pricing; e-commerce (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:joreco:v:59:y:2021:i:c:s0969698920313588 DOI: 10.1016/j.jretconser.2020.102350 Access Statistics for this article Journal of Retailing and Consumer Services is currently edited by Harry Timmermans More articles in Journal of Retailing and Consumer Services from Elsevier |
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