Remote Purchase Environments: The Influence of Return Policy Leniency on Two-Stage Decision Processes
Abstract
The growth of catalog sales and the enormous potential of e-commerce elevates the importance of understanding remote purchase. Remote purchase environments differ from traditional bricks-and-mortar purchases in that the purchase decision is more likely to be framed as two separate decisions: consumers' decisions to order and, upon receipt, their decisions to keep or return the item. These two decisions are separated by a period of time, and crucial experiential information often is available only at the second decision point (i.e., after receipt). Consumers' initial lack of experiential information makes product choice more risky. Return policy leniency is one way to minimize the inherent consumer risk, but retailers may avoid instituting overtly lenient policies because they expect increased return rates. However, the endowment effect suggests some surprising benefits of return policy leniency to the retailer. Results from three experiments provide support for the idea that product ownership depends more on perception than possession.
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No comprehensive research has been carried out, to the authors' knowledge, on the responses to return policies among consumers of different cultures.
“Despite much attention being given to the ambivalence in lenient return policies, no comprehensive research has been carried out, to the authors' knowledge, on the responses to return policies among consumers of different cultures (Wood,2001; Babakus, Cornwell, Mitchell, & Schlegelmilch, 2004).”
From Do good return policies work across cultures? Effect of lenient return policies on online shopper perceptions in Eastern culture (2013) · cites this paper as Wood,2001
As remote purchases involve surges in online shopping, lenient return policies have become more important than ever.
“Moreover, as remote purchases involve surges in online shopping, lenient return policies have become more important than ever (Wood, 2001).”
From Do good return policies work across cultures? Effect of lenient return policies on online shopper perceptions in Eastern culture (2013) · cites this paper as Wood, 2001
Return policy leniency of off-site retailers decreases the deliberation time involved in consumer purchase decision.
“Wood (2001) showed that return policy leniency of off-site retailers decreases the deliberation time involved in consumer purchase decision and increases the pre-receipt expectation of product quality.”
From Do good return policies work across cultures? Effect of lenient return policies on online shopper perceptions in Eastern culture (2013) · cites this paper as Wood (2001)
Wood (2001) pointed out that the conditions for a lenient return policy include time limit, restriction, refund method, and return of sale items.
“Wood (2001) pointed out that the conditions for a lenient return policy include time limit, restriction, refund method, and return of sale items.”
From Do good return policies work across cultures? Effect of lenient return policies on online shopper perceptions in Eastern culture (2013) · cites this paper as Wood (2001)
Most of these researchers have focused their attention on manufacturers' or retailers' perspectives on profits rather than consumers' perceptions and behavioral changes.
“However, most of these researchers have focused their attention on manufacturers' or retailers' perspectives on profits rather than consumers' perceptions and behavioral changes (Wood,2001).”
From Do good return policies work across cultures? Effect of lenient return policies on online shopper perceptions in Eastern culture (2013) · cites this paper as Wood,2001
Return policy leniency of off-site retailers increases the pre-receipt expectation of product quality.
“Wood (2001) showed that return policy leniency of off-site retailers decreases the deliberation time involved in consumer purchase decision and increases the pre-receipt expectation of product quality.”
From Do good return policies work across cultures? Effect of lenient return policies on online shopper perceptions in Eastern culture (2013) · cites this paper as Wood (2001)
The findings do not fully support previous studies which demonstrated that more lenient return policies led to more positive consumer reactions.
“But this does not fully support the findings of previous studies which demonstrated that more lenient return policies led to more positive consumer reactions (Bonifield et al., 2010: King et al., 2008; Wood, 2001).”
From Do good return policies work across cultures? Effect of lenient return policies on online shopper perceptions in Eastern culture (2013) · cites this paper as Wood, 2001
Cites
Experimental Tests of the Endowment Effect and the Coase Theorem
Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1990) · Journal of Political Economy · doi:10.1086/261737 · Cited by 3,194 · see citing works
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Understanding customer experience throughout the customer journey
Lemon, K. N., & Verhoef, P. C. (2016) · Journal of Marketing · doi:10.1509/jm.15.0420 · Cited by 5,765 · see citing works
Signaling the Trustworthiness of Small Online Retailers
Wang, S., Beatty, S. E., & Foxx, W. (2004) · Journal of Interactive Marketing · doi:10.1002/dir.10071 · Cited by 287 · see citing works
Online purchase return policy leniency and purchase decision: Mediating role of consumer trust
Oghazi, P., Karlsson, S., Hellström, D., & Hjort, K. (2018) · Journal of Retailing and Consumer Services · doi:10.1016/j.jretconser.2017.12.007 · Cited by 229 · see citing works
The leniency of return policy and consumers' repurchase intention in online retailing
Wang, Y., Anderson, J., Joo, S.-J., & Huscroft, J. R. (2019) · Industrial Management & Data Systems · doi:10.1108/imds-01-2019-0016 · Cited by 80 · see citing works
Confente, I., Russo, I., Peinkofer, S., & Frankel, R. (2021) · International Journal of Physical Distribution & Logistics Management · doi:10.1108/ijpdlm-03-2020-0089 · Cited by 50 · see citing works
Yang, S. J., & Choi, Y. J. (2013) · Asia Marketing Journal · doi:10.53728/2765-6500.1519 · Cited by 2 · see citing works
- Authors
- Wood, S. L.
- Affiliations
- University of South Carolina (US)
- Corresponding author
- Wood, Stacy L.
- ORCID
- Wood, Stacy L.
- Venue
- Journal of Marketing Research
- Publisher
- SAGE Publications
- Published
- 2001-05
- Volume
- 38
- Issue
- 2
- Pages
- 157-169
- ISSN
- 0022-2437 (ISSN-L)
- 1547-7193
- OpenAlex
- W2144947015
- Cited by
- 434
- References
- 1
- Citations by year
- 2026: 14 · 2025: 30 · 2024: 18 · 2023: 22 · 2022: 38 · 2021: 30 · 2020: 19 · 2019: 22 · 2018: 25 · 2017: 30 · 2016: 23 · 2015: 24 · 2014: 17 · 2013: 19 · 2012: 14
- FWCI
- 27.68
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Journal of Marketing Research (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Consumer Market Behavior and Pricing
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Business, Management and Accounting › Marketing › Consumer Retail Behavior Studies
- Keywords
- two-stage decision process, endowment effect, consumer risk, product ownership, return decisions, catalog sales, e-commerce, experiential information
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