Managing Internet Product Returns: A Focus on Effective Service Operations

Decision Sciences, Forthcoming

Posted: 30 Nov 2006

See all articles by Diane Mollenkopf

Diane Mollenkopf

University of Tennessee, Knoxville - College of Business Administration

Elliot Rabinovich

Arizona State University - W.P. Carey School of Business

Timothy M. Laseter

University of Virginia - Darden School of Business; Emory University - Goizueta Business School; University of Navarra, IESE Business School; London Business School; New York University (NYU) - Leonard N. Stern School of Business

Kenneth K. Boyer

Michigan State University - Marketing & Supply Chain Management

Abstract

Product returns present one of the biggest operational challenges in the world of Internet retailing due to the sheer volume and cost of processing returns. But returns also represent an often-missed opportunity to manage customer relationships and build customer loyalty to the retailer. Based upon data from a survey of 464 customers of five different Internet retailers, this paper explores how firms' returns management systems affect loyalty intentions. We draw upon extant literature in the fields of Internet retailing, service quality, supply chain management, and customer satisfaction/loyalty to develop a model and a set of hypotheses relating ten latent variables in the service returns offering area. Our resulting structural equation model provides evidence of the impact of the returns management system upon customer loyalty intentions. The model also identifies effects on loyalty intentions arising from customers' satisfaction with and perceptions of the value of the returns service offered. These findings will help inform managers' choices regarding investment in the returns management system as an element of service quality improvement and a potential means of improved profitability. In addition, this study's empirical exploration and testing of a returns management model in the Internet retailing environment is a contribution to the currently underrepresented body of academic literature linking marketing and supply chain management in the context of end consumers.

Keywords: E-commerce, Customer Loyalty, Returns Management, Service Operations, Service Recovery

Suggested Citation

Mollenkopf, Diane and Rabinovich, Elliot and Laseter, Timothy M. and Boyer, Kenneth K., Managing Internet Product Returns: A Focus on Effective Service Operations. Available at SSRN: https://ssrn.com/abstract=947634

Diane Mollenkopf

University of Tennessee, Knoxville - College of Business Administration ( email )

453 Haslam Business Building
Knoxville, TN 37996
United States

Elliot Rabinovich (Contact Author)

Arizona State University - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

Timothy M. Laseter

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/faculty/laseter.htm

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States

University of Navarra, IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Kenneth K. Boyer

Michigan State University - Marketing & Supply Chain Management ( email )

East Lansing, MI 48824-1121
United States
517 432-5535, ext. 268 (Phone)

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