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ABSTRACT
This research focuses on understanding consumers' online return behaviors. We empirically differentiate consumers' return behaviors into two broad categories - legitimate return behaviors and opportunistic return behaviors and find that some factors such as impulsiveness, desire for uniqueness, product compatibility, perceived risk and social influence contribute to leading to legitimate return behaviors, while some factors such as immorality, self-monitoring, and social influence resulting opportunistic return behaviors. In addition, the results suggest that legitimate return behaviors can increase consumers' repatronage intention, however, opportunistic return behaviors reduce consumers' repatronage intention. Our study contributes to the theoretical understanding of online consumers' complex return behaviors and thus adds depth to the literature of product returns. Also, by identifying the drivers of product return behaviors, this study is able to help e-tailers reduce product returns and thus increase their profits.
Keywords: E-commerce; Consumers' product return behavior; Legitimate return behavior; Opportunistic return behavior; Re-patronage intention
1.Introduction
Product returns cost U.S. manufacturers and retailers approximately $100 billion annually in lost sales through reboxing, restocking and reselling, reducing profits by 3.8% on average per retailer or manufacturer [Petersen & Kumar 2012]. Product return is a dreaded part of retailing, particularly e-tailers have it much worse than their brick and mortar counterparts. Research found that at least 30% of all e-commerce orders end up being returned, as against just 8.89% of brick and mortar sales [Rudolph 2016]. As evident from these numbers, the costs of product returns for online shopping are too great to be ignored. How to reduce the e-tailers' rate of returns and the return cost? Although e-tailers are taking criticism for the generous return policy since it can be abused in ways that erode firm profits (i.e., customers take advantage of retailers' liberal return policy and return the products deliberately), using a restrictive return policy is not a solution because the restricted return policy could reduce customer satisfaction, increase the perceived risk, and thus negatively affect customers' decision making [Petersen & Kumar 2009]. Therefore, as many e-tailers still offer free shipping and free return shipping, delighting customers but raising cost for the businesses, the problem of increasing product returns needs to be comprehensively addressed.
A number of factors could contribute to the e-railers' high rates of product returns. For...