Assessing Impacts of Store and Salesperson Dimensions of Retail Service Quality on Consumer Returns

Necati Ertekin, Michael E. Ketzenberg and Gregory R. Heim

Production and Operations Management, 2020, vol. 29, issue 5, 1232-1255

Abstract: This study contributes to the understanding of consumer return behavior by examining associations between in‐store customer shopping experiences and subsequent customer returns. Return rates can vary a great deal across stores within a company and across salespersons within a store. We empirically examine returns across these two levels with respect to three retail service quality dimensions: salesperson friendliness, salesperson competence, and store environment. We conduct a detailed analysis using transaction data and customer survey responses from 25,131 customers at a national jewelry retailer. We find salesperson friendliness, salesperson competence, and store environment are significantly associated with subsequent return events, since, theoretically, customers use the three service quality dimensions as information cues to form their product quality perceptions. Our analysis reveals managerially relevant insights for retailers. The empirical associations suggest retailer management might obtain the most benefit in reducing returns from improving salesperson competence, which is followed by improving store environment and improving salesperson friendliness. We also conduct analyses using customer shopping attributes to identify how retailers might modify service for different customer segments to increase the efficacy of return prevention. Lastly, our counterfactual analysis predicts substantial improvements in return rates and net sales due to potential store execution efforts targeted at improving salesperson friendliness, salesperson competence, or store environment. The predictions support the idea that return prevention should start at the point of sale.

Date: 2020
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