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Return policy, No joke: An investigation into the impact of a retailer's return policy on consumers' decision making

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  • Rokonuzzaman, Md
  • Iyer, Pramod
  • Harun, Ahasan
Abstract
This study investigates the important role of a retailer's return policy in consumers' decision making. Utilizing signaling theory and the Cue Diagnosticity framework, this study posits that return policy, as a cue from a retailer, interacts with other cues (product, price, and product quality) to reduce perceived purchase risk and increases store image and patronage intention. Employing factorial experiment design, the authors conduct two studies and find support for several hypotheses. Results show that consumers value return policies depending upon the situation. A lenient return policy drives down purchase risk and leads consumers to have positive store images and higher patronage intentions. Both theoretical and managerial implications of the findings are provided.

Suggested Citation

  • Rokonuzzaman, Md & Iyer, Pramod & Harun, Ahasan, 2021. "Return policy, No joke: An investigation into the impact of a retailer's return policy on consumers' decision making," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:joreco:v:59:y:2021:i:c:s0969698920313540
    DOI: 10.1016/j.jretconser.2020.102346
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    5. Fernandez-Lores, S. & Crespo-Tejero, N. & Fernández-Hernández, R. & García-Muiña, F.E., 2024. "Online product returns: The role of perceived environmental efficacy and post-purchase entrepreneurial cognitive dissonance," Journal of Business Research, Elsevier, vol. 174(C).
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