Exchange and Refund of Complementary Products

15 Pages Posted: 11 Oct 2015

See all articles by Yoonju Han

Yoonju Han

Indiana University - Kelley School of Business - Department of Marketing

Sandeep R. Chandukala

Indiana University - Kelley School of Business - Department of Marketing

Hai Che

Indiana University - Kelley School of Business

Date Written: October 9, 2015

Abstract

A common dilemma a consumer faces during product return pertains to the decision of exchanging the product or obtaining a refund. This issue becomes even more salient for durable goods, when the initial purchase involves complementary products from different categories. This research examines consumer’s trade-off decision between returning and keeping complementary products by exploring various retail actions (using umbrella branded products (UBP)) and customer characteristics. We also investigate the trade-off between product exchange and refund when consumer returns a product. We find interesting extensions to past research wherein UBP are returned less and result in greater exchange than refund. Furthermore, an interesting caveat is that higher degree of complementarity between UBP intensifies the impact of various factors on exchange as opposed to refund of products. Implications for retail managers and sales teams are explored.

Keywords: Product return, Product exchange and refund, Umbrella branding, Nested logit, Multinomial logit

Suggested Citation

Han, Yoonju and Chandukala, Sandeep R. and Che, Hai, Exchange and Refund of Complementary Products (October 9, 2015). Marketing Letters, Forthcoming; Kelley School of Business Research Paper No. 15-75. Available at SSRN: https://ssrn.com/abstract=2671937

Yoonju Han

Indiana University - Kelley School of Business - Department of Marketing ( email )

Kelley School of Business
Bloomington, IN 47405
United States

Sandeep R. Chandukala (Contact Author)

Indiana University - Kelley School of Business - Department of Marketing ( email )

Kelley School of Business
Bloomington, IN 47405
United States

Hai Che

Indiana University - Kelley School of Business ( email )

1309 East Tenth Street
Indianapolis, IN 47405-1701
United States

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