Internal and External Drivers of Consumers’ Product Return Behaviors

Product return is a necessary part of the exchange process between companies and customers. It accounts for approximately 16% of total sales and a reduction in retailer / manufacturer profits by 3.8% on average. However, industry data also indicates that a significant portion of products are returned for reasons other than product failure – e.g., change of mind, found a lower price elsewhere, or fraudulent and unethical reasons. Consequently, many firms (e.g., REI) have altered their generous return policies to protect their profits. However, it’s been found that the restricted return policy could also reduce customer satisfaction, increase the perceived risk, and thus negatively affect customers’ loyalty towards a particular store or firm. Thus having a restrictive return policy does not help either. Extant literature mainly focuses on return policies. Little attention has been devoted to the product return behavior itself, thus missing the consumer’s perspective. This study, therefore, focuses on understanding consumers’ return behaviors, including different types of return behaviors, and the drivers and consequences of these different return behaviors. Towards this goal, this study first categorizes all possible types of consumers’ return behaviors into two broad categories - legitimate return behaviors and opportunistic return behaviors. Second, both internal (i.e., variety seeking, impulsiveness, perceived uniqueness, materialism, level of morality, and self-monitoring) and external drivers (i.e., product compatibility, returning cost, perceived risk, complexity of procedure, and social group influence) of consumers’ product return behaviors are identified. Third, the relationship between these drivers of return behavior and the type of return behavior are examined. Finally, the influence of these two different types of return behaviors on consumer’s re-patronage intention is examined. This study uses a survey method to collect data in two phases - pilot phase and main study. In the pilot phase, data were collected from students and used to assess the factor structure, reliability and validity. In the main study, data were collected from both students (N=367) and non-students using M-Turk (N=395). The psychometric properties of the scale items were once again assessed using covariance based Confirmatory Factor Analysis procedure. Finally, multivariate regression was used to test the hypothesized relationships between the drivers of return behavior, types of return behavior, and the re-patronage intention. The findings indicate that product compatibility and desire for uniqueness negatively influence legitimate return behavior; whereas impulsiveness, perceived risk and social group have a positive influence. For opportunistic return behavior, social group and immorality positively influence both legitimate and opportunistic return behavior. However, other drivers have no influence on consumers’ return behavior. Finally, legitimate return behavior positively influences consumer’s re-patronage intention, while opportunistic return behavior has a negative influence. This study makes two major contributions. First, it contributes to the theoretical understanding of complex return behavior, including legitimate return and opportunistic return behavior, and thus adds depth to the literature of product returns. Second, by identifying the drivers of product return behaviors such as product compatibility, perceived risk of keeping the product, social group influence, and immorality, this study offers managers knowledge that will help reduce product returns, thus increasing their profits.