Discussion
A better understanding is needed of the trade-offs that product
returns can bring to the profitability of a firm. Are product
returns a necessary evil (Petersen and Kumar, 2009) because
they force a firm to spend too much on reverse logistics and
consume losses from the sales of returned merchandise, or are
product returns potentially beneficial because they can add
value to the firm by reducing a customer’s purchase risk or
through other positive behavioral consequences (e.g., higher
repurchase behavior)? Thus far, research in marketing has not
addressed the role of product returns in the exchange process,
only that product returns affect the accurate estimation of
customer demand and should not be ignored (Anderson,
Hansen, and Simester 2009). In addition, there has been
little research in marketing to establish metrics for managing
customers strategically that include product returns.