Return Policy Signaling: An Explorative Study of Swedish E-tailers’

Abstract: Purpose: Return policies are an important component for consumers when making a decision to transact with an E-tailer, as such it is equally important for E-tailers’ that the returns policy aids in this decision by reducing information asymmetry. While lenient return policies have the ability to influence the customer positively, they are also subject to opportunistic behavior from consumers, as such E-tailer’s face considerable uncertainty about how to set returns policies. This thesis aimed to confirm findings of previous research from the E-tailers’ perspective, but more importantly aimed to test signaling theory and explore if there is a mismatch between what Swedish E-tailers’ signal in their return policy verses how returns are handled in practice. Methodology: In order to fulfill the purpose of the study, a multiple case study was conducted where 35 companies were contacted with 13 taking part in the study. Cases were selected based on replication logic and telephone interviewing was used as a method, additionally content analysis was conducted on the online policies of the E-tailers’ and further used for the analysis of the interviews. Findings: The findings in part confirm the ideas brought forward by previous research on return policies but from the E-tailers’ perspective, additionally the results suggest that there is in fact a mismatch between what is signaled in the return policy and how returns are handled in practice. In summary Swedish E-tailers’ are more lenient than what is signaled in their return policies. Research Implications: The in-hand thesis contributes to return policy research through finding a mismatch and proposes future research to investigate exceptions made on the returns policy through the theoretical lens of consumer satisfaction and consumer delight. Practical Implications: The in-hand thesis proposes that E-tailers’ try to reduce information asymmetry as to how products not meeting the minimum requirements of the returns policy are handled, this could potentially create a more personalized view of returns and create repeat and loyal customers.