Abstract
Customer product returns are a key challenge for online retailers. Previous research primarily focused on causes of returns and possible interventions to reduce customers’ product returns and concomitant costs for online retailers. However, little is known about the effect of product returns on key relational outcomes. Drawing on relationship marketing theory, we test a model that relates product returns to three relationship marketing outcomes—customer satisfaction, trust, and positive word-of-mouth. A field study based on online panel data from customers of eight large online retailers demonstrates that product returns negatively affect customer satisfaction with the retailer, customer trust, and word-of-mouth. The findings extend previous research by revealing that product returns can detrimentally affect relationships with customers. Implications for e-commerce research and management are discussed.
Similar content being viewed by others
References
Ahearne, M., Bhattacharya, C. B., & Gruen, T. (2005). Antecedents and consequences of customer-company identification: expending the role of relationship marketing. Journal of Applied Psychology, 90(3), 574–585.
Anderson, E. W. (1998). Customer satisfaction and word of mouth. Journal of Service Research, 1(1), 5–17.
Anderson, J. C., & Narus, J. A. (1990). A model of distributor firm and manufacturer firm working partnerships. Journal of Marketing, 54(1), 42–58.
Babin, B. J., & Darden, W. R. (1996). Good and bad shopping vibes: spending and patronage satisfaction. Journal of Business Research, 35(3), 201–206.
Berry, L. L. (1983). Relationship marketing. In L. L. Berry, G. L. Shostack, & G. Upah (Eds.), Emerging perspectives on services marketing (pp. 25–28). Chicago: American Marketing Association.
Blut, M., Beatty, S. E., Evanschitzky, H., & Brock, C. (2014). The impact of service characteristics on the switching costs–customer loyalty link. Journal of Retailing, 90(2), 275–290.
Bower, A. B., & Maxham III, J. G. (2012). Return shipping policies of online retailers: normative assumptions and the long-term consequences of fee and free returns. Journal of Marketing, 76(5), 110–124.
Brohan, M. (2013). Reducing the rate of returns, Internet Retailer. Retrieved September 24, 2015, from http://www.internetretailer.com/2013/05/29/reducing-rate-returns.
Burnham, T. A., Frels, J. K., & Mahajan, V. (2003). Consumer switching costs: a typology, antecedents, and consequences. Journal of the Academy of Marketing Science, 31(2), 109–126.
Buttle, F. A. (1998). Word of mouth: understanding and managing referral marketing. Journal of Strategic Marketing, 6(3), 241–254.
Chuang, S.-C., Cheng, Y.-H., Chang, C.-J., & Yang, S.-H. (2012). The effect of service failure types and service recovery on customer satisfaction: a mental accounting perspective. The Service Industries Journal, 32(2), 257–271.
Dai, H., & Salam, A. F. (2014). Does service convenience matter? An empirical assessment of service quality, service convenience and exchange relationship in electronic mediated environment. Electronic Markets, 24(4), 269–284.
Day, R. L. (1984). Modeling choices among alternative responses to dissatisfaction. In T. C. Kinnear (Ed.), Advances in consumer research (Vol. 11, pp. 496–499). Provo: Association for Consumer Research.
De Matos, C. A., & Rossi, C. A. V. (2008). Word-of-mouth communications in marketing: a meta-analytic review of the antecedents and moderators. Journal of the Academy of Marketing Science, 36(4), 578–596.
Dwyer, F. R., Schurr, P. H., & Oh, S. (1987). Buyer-seller developing relationships. American Journal of Marketing, 51(2), 11–27.
Epstein, S. (1994). Integration of the cognitive and the psychodynamic unconscious. American Psychologist, 49(8), 709–724.
Festinger, L. (1957). A theory of cognitive dissonance. California: Stanford University Press.
Fuller, C. M., Simmering, M. J., Atinc, G., Atinc, Y., & Babin, B. J. (2016). Common methods variance detection in business research. Journal of Business Research, 69(8), 3192–3198.
Gallino, S., & Moreno, A. (2014). Integration of online and offline channels in retail: the impact of sharing reliable inventory availability information. Management Science, 60(6), 1434–1451.
Galloway, G., Mitchell, R., Getz, D., Crouch, G., & Ong, B. (2008). Sensation seeking and the prediction of attitudes and behaviours of wine tourists. Tourism Management, 29(5), 950–966.
Gao, H., & Liu, D. (2014). Relationship of trustworthiness and relational benefit in electronic catalog markets. Electronic Markets, 24(1), 7–75.
Gefen, D. (2000). E-commerce: the role of familiarity and trust. Omega, 28(6), 725–737.
Gefen, D. (2002). Reflections on the dimensions of trust and trustworthiness among online consumers. SIGMIS Database, 33(3), 38–53.
Gneezy, A. (2016). Field experimentation in marketing research. Journal of Marketing Research, in press, doi:10.1509/jmr.16.0225.
Griffis, S. E., Rao, S., Goldsby, T. J., & Niranjan, T. T. (2012a). The customer consequences of returns in online retailing: an empirical analysis. Journal of Operations Management, 30(4), 282–294.
Griffis, S. E., Rao, S., Goldsby, T. J., Voorhees, C. M., & Deepak, I. (2012b). Linking order fulfillment performance to referrals in online retailing: an empirical analysis. Journal of Business Logistics, 33(4), 279–294.
Grönroos, C. (1990). Service management and marketing: managing the moments of truth in service competition. Lexington: Lexington Books.
Gummerus, J., Liljander, V., Weman, E., & Pihlström, M. (2012). Customer engagement in a Facebook brand community. Management Research Review, 35(9), 857–877.
Gustafsson, A., Johnson, M. D., & Roos, I. (2005). The effects of customer satisfaction, relationship commitment dimensions, and triggers on customer retention. Journal of Marketing, 69(4), 210–218.
Gwinner, K. P., Gremler, D. D., & Bitner, M. J. (1998). Relational benefits in services industries: the customer’s perspective. Journal of the Academy of Marketing Science, 26(2), 101–114.
Harris, L. C. (2008). Fraudulent return proclivity: an empirical analysis. Journal of Retailing, 84(4), 461–476.
Hennig-Thurau, T., Gwinner, K. P., & Gremler, D. D. (2002). Understanding relationship marketing outcomes: an integration of relational benefits and relationship quality. Journal of Service Research, 4(3), 230–247.
Hui, M. K., Ho, C. K., & Wan, L. C. (2011). Prior relationships and consumer responses to service failures: a cross-cultural study. Journal of International Marketing, 19(1), 59–81.
Ibi research (2013). Retourenmanagement im online-Handel – Das Beste daraus machen. Ibi Research. Retrieved September 24, 2015, from: http://www.ibi.de/files/Retourenmanagement-im-Online-Handel_-_Das-Beste-daraus-machen.pdf.
Kim, D., & Benbasat, I. (2006). The effects of trust-assuring arguments on consumer trust in internet stores: application of Toulmin’s model of argumentation. Information Systems Research, 17(3), 286–300.
Kim, D. J., Ferrin, D. L., & Raghav Rao, H. (2009a). Trust and satisfaction, two stepping stones for successful e-commerce relationships: a longitudinal exploration. Information Systems Research, 20(2), 237–257.
Kim, T. T., Kim, W. G., & Kim, H.-B. (2009b). The effects of perceived justice on recovery satisfaction, trust, word-of-mouth, and revisit intention in upscale hotels. Tourism Management, 30(1), 51–62.
Koufteros, X., Droge, C., Heim, G., Massad, N., & Vickery, S. K. (2014). Encounter satisfaction in E-tailing: are the relationships of order fulfillment service quality with its antecedents and consequences moderated by historical satisfaction? Decision Sciences, 45(1), 5–48.
Laroche, M., Yang, Z., McDougall, G. H. G., & Bergeron, J. (2005). Internet versus bricks-and-mortar retailers: an investigation into intangibility and its consequences. Journal of Retailing, 81(4), 251–267.
Liao, C., Palvia, P., & Lin, H. N. (2010). Stage antecedents of consumer online buying behavior. Electronic Markets, 20(1), 53–65.
Lim, K., Sia, C., Lee, M., & Benbasat, I. (2006). Do I trust you online, and if so, will I buy? An empirical study of two trust-building strategies. Journal of Management Information Systems, 23(2), 233–266.
Maity, D., & Arnold, T. J. (2013). Search: an expense or an experience? Exploring the influence of search on product return intentions. Psychology and Marketing, 30(7), 576–587.
Malhotra, N. K., Kim, S. S., & Patil, A. (2006). Accounting for common method variance in IS research: reanalysis of past studies using a marker-variable technique. Management Science, 52(12), 1865–1883.
McNaughton, R. B., Osborne, P., Morgan, R. E., & Kutwaroo, G. (2001). Market orientation and firm value. Journal of Marketing Management, 17(5–6), 521–542.
Minnema, A., Bijmolt, T. H., Gensler, S., & Wiesel, T. (2016). To Keep or Not to Keep: Effects of Online Customer Reviews on Product Returns. Journal of Retailing, from: http://www.sciencedirect.com/science/article/pii/S002243591630001X.
Mollenkopf, D., Rabinovich, E., Laseter, T. M., & Boyer, K. K. (2007). Managing internet product returns: a focus on effective service operations. Decision Sciences, 38(2), 215–250.
Möller, K., & Halinen, A. (2000). Relationship marketing theory: its roots and direction. Journal of Marketing Management, 16(1–3), 29–54.
Moorman, C., Zaltman, G., & Deshpande, R. (1992). Relationships between providers and users of market research: the dynamics of trust within and between organizations. Journal of Marketing Research, 29(3), 314–328.
Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38.
Müller, K. (2013). Zitiert! Robert Gentz und Rubin Ritter verraten die offizielle Retourenquote von zalando. Deutsche-Startups. Retrieved September 24, 2015, from http://www.deutsche-startups.de/2013/01/18/zitiert-retourenquote-zalando/.
Neal, M. (2011). Beyond trust: Psychological considerations for recommender systems. In: H. R. Arabnia, L. Deligiannidis, A. M. G. Solo & A. Bahrami (Eds.), Proceedings of the 2011 EEE International Conference on e-Learning, e-Business, Enterprise Information Systems, and e-Government (pp. 365–369). Las Vegas: EEE'11.
Oliver, R. L. (1980). A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of Marketing Research, 17(4), 460–469.
Oliver, R. L. (1997). Satisfaction: A behavioral perspective on the consumer. New York: McGraw-Hill.
Parvatiyar, A., & Sheth, J. N. (2000). The domain and conceptual foundations of relationship marketing. In J. N. Sheth & A. Parvatiyar (Eds.), Handbook of relationship marketing (pp. 3–38). Thousand Oaks: Sage.
Pei, Z., Paswan, A., & Yan, R. (2014). E-tailer’s return policy, consumer′ s perception of return policy fairness and purchase intention. Journal of Retailing and Consumer Services, 21(3), 249–257.
Petersen, J. A., & Anderson, E. T. (2015). Leveraging product returns to maximize customer equity. In B. V. Kumar & D. Shah (Eds.), Handbook of research on customer equity in marketing (pp. 160–177). Cheltenham: Elgar Publishing.
Petersen, J. A., & Kumar, V. (2009). Are product returns a necessary evil? Antecedents and consequences. Journal of Marketing, 73(3), 35–51.
Pick, D., & Eisend, M. (2014). Buyers’ perceived switching costs and switching: a meta-analytic assessment of their antecedents. Journal of the Academy of Marketing Science, 42(2), 186–204.
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: a critical review of the literature and recommended remedies. Journal of Applied Psychology, 88(5), 879–903.
Powers, T. L., & Jack, E. P. (2013). The influence of cognitive dissonance on retail product returns. Psychology & Marketing, 30(8), 724–735.
Ram, A. (2016). UK retailers count the cost of returns, Financial Times, Retrieved September 2, 2016, from: http://www.ft.com/cms/s/0/52d26de8-c0e6-11e5-846f-79b0e3d20eaf.html#axzz4CVRhobWZ. (accessed
Ramanathan, R. (2011). An empirical analysis on the influence of risk on relationships between handling of product returns and customer loyalty in E-commerce. International Journal of Production Economics, 130(2), 255–261.
Rao, S., Griffis, S. E., & Goldsby, T. J. (2011). Failure to deliver? Linking online order fulfillment glitches with future purchase behavior. Journal of Operations Management, 29(7–8), 692–703.
Romaniuk, J., & Sharp, B. (2004). Conceptualizing and measuring brand salience. Marketing Theory, 4(4), 327–342.
Sabiote, E. F., & Román, S. (2009). The influence of social regard on the customer–service firm relationship: the moderating role of length of relationship. Journal of Business and Psychology, 24(4), 441–453.
Shah, D., Kumar, V., Qu, Y., & Chen, S. (2012). Unprofitable cross-buying: evidence from consumer and business markets. Journal of Marketing, 76(3), 78–95.
Statista (2014). Welches sind die drei häufigsten Gründe für Retouren in Ihrem Online-Shop? Statista. Retrieved September 24, 2015, from: http://de.statista.com/statistik/daten/studie/4423/umfrage/gruende-fuer-retouren-in-online-shops/.
The Economist (2013). Return to Santa – Ecommerce firms have a hard core of costly, impossible-to-please customers. Retrieved September 24, 2015, from: http://www.economist.com/news/business/21591874-e-commerce-firms-have-hard-core-costly-impossible-please-customers-return-santa.
Tsai, H. T., & Huang, H. C. (2007). Determinants of e-repurchase intentions: an integrative model of quadruple retention drivers. Information & Management, 44(3), 231–239.
Tversky, A., & Kahneman, D. (1973). Availability: a heuristic for judging frequency and probability. Cognitive Psychology, 5(2), 207–232.
Van Vaerenbergh, Y., Orsingher, C., Vermeir, I., & Lariviere, B. (2014). A meta-analysis of rela-tionships linking service failure attributions to customer outcomes. Journal of Service Research, 17(4), 381–398.
Walsh, G., Hennig-Thurau, T., Sassenberg, K., & Bornemann, D. (2010). Does relationship quality matter in e-services? A comparison of online and offline retailing. Journal of Retailing and Consumer Services, 17(2), 130–142.
Walsh, G., Gouthier, M., Gremler, D. D., & Brach, S. (2012). What the eye does not see, the mind cannot reject: can call center location explain differences in customer evaluations? International Business Review, 21(5), 957–967.
Walsh, G., Bartikowski, B., & Beatty, S. E. (2014). Impact of customer-based corporate reputation on non-monetary and monetary outcomes: the roles of commitment and service context risk. British Journal of Management, 25(2), 166–185.
Walsh, G., Albrecht, A. K., Kunz, W., & Hofacker, C. F. (2016). Relationship between online retailers’ reputation and product returns. British Journal of Management, 27(1), 3–20.
Wang, S., Beatty, S. E., & Liu, J. (2012). Employees’ decision making in the face of customers’ fuzzy return requests. Journal of Marketing, 76(6), 69–86.
Wangenheim, F. V., & Bayón, T. (2007). The chain from customer satisfaction via word-of-mouth referrals to new customer acquisition. Journal of the Academy of Marketing Science, 35(2), 233–249.
Weun, S., Beatty, S. E., & Jones, M. A. (2004). The impact of service failure severity on service recovery evaluations and post-recovery relationships. Journal of Services Marketing, 18(2), 133–146.
Weverbergh, R. (2013). The best kept secret in e-commerce is out. Here’s Zalando’s official return rate. Retrieved September 24, 2015, from: http://www.whiteboardmag.com/the-best-kept-secret-in-e-commerce-is-out-heres-zalandos-official-return-rate/.
Wood, S. L. (2001). Remote purchase environments: the influence of return policy leniency on two-stage decision processes. Journal of Marketing Research, 38(2), 157–169.
Zhang, Y., Fang, Y., Wei, K., Ramsey, E., McCole, P., & Chen, H. (2011). Repurchase intention in B2C e-commerce—a relationship quality perspective. Information & Management, 48(6), 192–200.
Zhou, W. & Hinz, O. (2015). Determining profit-optimizing return policies – a two-step approach on data from taobao.com. Electronic Markets (Online Version of Record published before inclusion in an issue).
Author information
Authors and Affiliations
Corresponding author
Additional information
Responsible Editor: Hans-Dieter Zimmermann
Appendix
Appendix
Measures
Construct and item | Adapted from |
---|---|
Customer satisfactiona | Tsai & Huang (2007) |
I am satisfied with the services this online retailer provides. | |
Customer trusta | Walsh et al. (2016) |
This is an online retailer that you can trust. | |
Customer positive word-of-moutha | Koufteros et al. (2014) |
I would say positive things about this online retailer to other people. | |
Customer monthly spending | Galloway et al. (2008) |
How much, on average, do you spend per month at this online retailer? | |
1 = up to 20 Euro | |
2 = 21 to 40 Euro | |
3 = 41 to 60 Euro | |
4 = 61 to 80 Euro | |
5 = 81 to 100 Euro | |
6 = more than 100 Euro |
Rights and permissions
About this article
Cite this article
Walsh, G., Brylla, D. Do product returns hurt relational outcomes? some evidence from online retailing. Electron Markets 27, 329–339 (2017). https://doi.org/10.1007/s12525-016-0240-3
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s12525-016-0240-3