Shipping fee schedules and return behavior

Anke Lepthien () and Michel Clement ()
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Anke Lepthien: University of Hamburg
Michel Clement: University of Hamburg

Marketing Letters, 2019, vol. 30, issue 2, No 3, 165 pages

Abstract: Abstract We study the influence of shipping fee schedules on the return behavior of customers. Based on a randomized field experiment, we analyze the behavior of visitors of an online shop. Specifically, online shop visitors are assigned to one of seven different shipping fee structures where (a) minimum order sizes, (b) shipping fees, and (c) threshold-based free shipping levels are varied. We observe the number and amount of purchases as well as the number and amount of returns, which allows us to calculate the value of the purchased goods after returns in € (net order value). We find a positive effect of shipping fees on purchase value (pre- and post-return). However, we find that minimum order values lead to slightly more returns by current customers and that threshold-based free shipping leads across all customers to a higher number of strategic returns because they tend to return more items. Threshold-based free shipping decreases purchase incidence (but not purchase value). Interestingly, we do not find negative effects of minimum order value on purchase incidence or purchase value.

Keywords: Shipping fees; Field experiment; Return behavior; Customer life time value (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11002-019-09486-8

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