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The impact of returns policies on profitability : A fashion e-commerce case

Hjort, Klas LU and Lantz, Björn (2016) In Journal of Business Research 69(11). p.4980-4985
Abstract

Research on returns policies is scarce and inconclusive. This study is a first attempt to empirically analyze and describe the effects of returns policies on consumer behavior and the moderating effects of the policies on profitability. The method involves analyzing the transactional data of a Swedish online fashion retailer. The results of the regression analyses show that with a lenient returns policy, repeat customers generate a significantly higher contribution per order, while returners and customers who enjoy free returns generate a significantly lower contribution per order. In addition, returners and repeat customers generate a significantly higher total contribution, while customers who enjoy free returns generate a... (More)

Research on returns policies is scarce and inconclusive. This study is a first attempt to empirically analyze and describe the effects of returns policies on consumer behavior and the moderating effects of the policies on profitability. The method involves analyzing the transactional data of a Swedish online fashion retailer. The results of the regression analyses show that with a lenient returns policy, repeat customers generate a significantly higher contribution per order, while returners and customers who enjoy free returns generate a significantly lower contribution per order. In addition, returners and repeat customers generate a significantly higher total contribution, while customers who enjoy free returns generate a significantly lower total contribution. Hence, returns policies that are free of charge do not necessarily benefit retailers in terms of long-term profitability. From a managerial perspective, the results provide guidance on how to address the recent changes in European consumer legislation.

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Please use this url to cite or link to this publication:
author
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Consumer behavior, Fashion e-commerce, Returns, Returns policy, Reverse logistics
in
Journal of Business Research
volume
69
issue
11
pages
4980 - 4985
publisher
Elsevier
external identifiers
  • Scopus:84964661105
ISSN
0148-2963
DOI
10.1016/j.jbusres.2016.04.064
language
English
LU publication?
yes
id
c45c12c1-4840-4204-b6ed-e87ad53a1f10
date added to LUP
2016-10-05 09:33:02
date last changed
2016-10-05 13:42:06
@misc{c45c12c1-4840-4204-b6ed-e87ad53a1f10,
  abstract     = {<p>Research on returns policies is scarce and inconclusive. This study is a first attempt to empirically analyze and describe the effects of returns policies on consumer behavior and the moderating effects of the policies on profitability. The method involves analyzing the transactional data of a Swedish online fashion retailer. The results of the regression analyses show that with a lenient returns policy, repeat customers generate a significantly higher contribution per order, while returners and customers who enjoy free returns generate a significantly lower contribution per order. In addition, returners and repeat customers generate a significantly higher total contribution, while customers who enjoy free returns generate a significantly lower total contribution. Hence, returns policies that are free of charge do not necessarily benefit retailers in terms of long-term profitability. From a managerial perspective, the results provide guidance on how to address the recent changes in European consumer legislation.</p>},
  author       = {Hjort, Klas and Lantz, Björn},
  issn         = {0148-2963},
  keyword      = {Consumer behavior,Fashion e-commerce,Returns,Returns policy,Reverse logistics},
  language     = {eng},
  number       = {11},
  pages        = {4980--4985},
  publisher    = {ARRAY(0xa4d18d0)},
  series       = {Journal of Business Research},
  title        = {The impact of returns policies on profitability : A fashion e-commerce case},
  url          = {http://dx.doi.org/10.1016/j.jbusres.2016.04.064},
  volume       = {69},
  year         = {2016},
}