Consumer Engagement in the E-Waste Reverse Supply Chain with Dual-Channel Collection Service

Abstract

We examine a voluntary e-waste reverse supply chain where consumers possess both functional used products and end-of-life products. A retailer serves as a collector and operates a dual-channel collection service, accepting both types of products. A processor purchases end-of-life products from the retailer, recovering their residual value, while functional products are sold in the secondary market. Consumers can either use the retailer’s collection service or directly sell their functional products in the secondary market. We analyze consumers' optimal channel choice, accounting for heterogeneity in their hassle costs. Based on these choices, we determine the equilibrium collection prices offered to consumers and the wholesale price the processor pays for end-of-life products. Our findings show that while dual-channel collection services offer convenience, they do not necessarily lead to higher e-waste collection rates, as the processor can exploit the collection pooling effect. Furthermore, we show that improving the convenience of collection channels and enhancing the value recovery process of e-waste are complementary strategies, and potential subsidies should be strategically targeted at the collector rather than the processor. These insights emphasize the importance of consumer participation in the first mile of the reverse supply chain and provide guidance for regulators aiming to improve e-waste collection rates.

Keywords: E-waste, Consumer engagement, Reverse supply chain, subsidy policy