Academic and practical considerations for ecommerce returns management: critical issues and management approaches

Abstract

E-commerce has transformed the retail industry. It plays an increasingly important role in the world economy and is seen as the engine of future global economic growth. Ecommerce is characterized by high return rates. With the rise of e-commerce activities, e-commerce returns have been a common phenomenon. How online sellers manage product returns is critical to their success and the future of e-commerce. This thesis focused on three critical issues related to e-commerce returns management and studied the return management approaches as possible solutions to mitigate these issues. First, offering the consumer a satisfactory return experience is critical to an online seller’s success. However, little is known about how the online return experience can be improved. This thesis examines whether providing consumers with an instant refund service can increase their satisfaction with the return experience. To obtain a comprehensive view of the outcomes of using an instant refund service, this thesis also studied the effects of an instant refund on several important consumer responses. Second, relationships with consumers are of great importance to online sellers. Online returns can detrimentally influence buyer–seller relationships. Therefore, online sellers need to know how to restore their relationship with consumers. This thesis studies how online sellers can approach the method and the fee aspects of their return shipping policy to repair the relationships. Third, the existing packed mail-based return mode used in e-commerce has a considerable negative impact on the natural environment. It is imperative to take measures to avoid its negative influence on the natural environment. On the contrary, a package-free return mode is more eco-friendly. This thesis studied key factors in green communication that affect consumers switching from mail return services to package-free return services. Three essays focusing on addressing these issues are included in this thesis. The between-subject experiments and the online survey were conducted to study the issues. The result shows that an instant refund service improves consumer online return experiences and other pivotal consumer responses. In terms of potential side-effects, instant refunds are not significantly associated with stronger product return intentions. Both using an integrated return shipping method and offering free return shipping can lead to a better buyer–seller relationship and improve other consumer responses. No interaction effect on the consumer responses was found between the return shipping method and the return shipping fee. It has been also found that consumer dissatisfaction and mail return habit only manifested weak effects on consumers’ intention to switch from mail return services to package-free return services. Green value has a much weaker impact on switching intention than service convenience. Service convenience was found to be the key factor in green communication. The theoretical contributions of this thesis on the e-commerce returns management literature were discussed. Managerially, the research findings of this thesis can help online sellers decide whether to evolve their conventional refund mode to a new instant refund mode, design their return shipping policies and promote their package-free return service, in order to mitigate the critical issues in their e-commerce returns management.