Beneficial Product Returns in Supply Chains
Production and Operations Management · 2021 · Volume 30 · Issue 11
Abstract
Many retailers and manufacturers accept product returns from consumers (via money-back guarantees) and retailers (via full-credit return policies) respectively. While the extant literature focuses on either manufacturer or retailer return policies, this study investigates both return policies and finds that a manufacturer's return policy can induce the retailer to adopt a return policy. Although accepting consumer returns hurts the manufacturer when the manufacturer sells through non-competing retailers, we find that the manufacturer isnotdestined to be hurt by accepting returns when selling to competing retailers that are differentiated in their returns rates.
Keywords
distribution channel, pricing, MBG, buyback
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