Leveraging product returns to maximize customer equity

J. Andrew Petersen, Eric T. Anderson

Research output: Chapter in Book/Report/Conference proceedingChapter

5 Scopus citations

Abstract

Product returns occur when a customer brings back a previously purchased product with the intent to receive a repair, refund, or replacement. Product returns provide a significant expense to businesses, with some studies showing that product returns cost US manufacturers and retailers an estimated S100 billion annually, reducing profits by around 3.8 percent on average per retailer or manufacturer (Blanchard, 2007). And, this cost is only likely to rise as retailers increasingly engage in multi-channel strategies. The increasing flexibility of retailers to allow customers to shop and purchase both online and offline has offered numerous benefits to consumers such as increases in value and convenience. However, it has also impacted customer product return behavior. Product returns are potentially more costly in this environment as customers cannot ‘touch and feel’ the product before purchase online and purchases online are often returned to the retail store (Ofek, Katona, and Sarvary, 2011). This is likely to decrease profit for the retailer through both increases in product returns and increases in product return management costs.

Original languageEnglish (US)
Title of host publicationHandbook of Research on Customer Equity in Marketing
PublisherEdward Elgar Publishing Ltd.
Pages160-177
Number of pages18
ISBN (Electronic)9781781004982
ISBN (Print)9781781004975
DOIs
StatePublished - Jan 1 2015

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)
  • Business, Management and Accounting(all)

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    Andrew Petersen, J., & Anderson, E. T. (2015). Leveraging product returns to maximize customer equity. In Handbook of Research on Customer Equity in Marketing (pp. 160-177). Edward Elgar Publishing Ltd.. https://doi.org/10.4337/9781781004982.00014