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Effectiveness of product return-prevention instruments: Empirical evidence

Gianfranco Walsh () and Michael Möhring ()
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Gianfranco Walsh: Friedrich-Schiller-Universität Jena
Michael Möhring: Friedrich-Schiller-Universität Jena

Electronic Markets, 2017, vol. 27, issue 4, No 5, 350 pages

Abstract: Abstract The convenience and ease of online shopping reduce consumers’ risk perceptions, which encourages the continued growth of online retailing but also may force online retailers to deal with expensive and excessively high product return rates. Despite efforts by e-commerce management practitioners and scholars to identify determinants of customer product return behavior, scarce research investigates the effectiveness of instruments designed explicitly to reduce customers’ actual return rates. Drawing on risk theory, this article tests the influence of three important instruments on product return prevention. Three separate field experiments among customers of a well-known European online retailer reveal, unexpectedly, that the use of a money-back guarantee increases product returns, whereas product reviews decrease the product return rate. The provision of free return labels has no influence on customer product return behavior. This article concludes with some managerial and theoretical implications of these results.

Keywords: E-commerce; Money-back guarantee; Online shopping; Prevention instruments; Product returns; Product reviews (search for similar items in EconPapers)
JEL-codes: L81 M31 (search for similar items in EconPapers)
Date: 2017
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