UTA Professor Publishes Research on Return Policies to Help Businesses Increase Sales

A professor at the University of Texas at Arlington – College of Business recently conducted a meta-analysis of retail return policies, discovering that some policies may actually increase sales and lower returns.

Assistant professor of marketing at UTA, Narayanan Janakiraman partnered with UTA doctoral candidate Holly Syrdal and University of Texas-Dallas doctoral candidate Ryan Freling to publish “The Effect of Return Policy Leniency on Consumer Purchase and Return Decisions: A Meta-analytic Review” in The Journal of Retailing.

In the paper, the team examined factors such as time leniency (within how many days an item can be returned), effort leniency (whether or not forms are required for return), scope leniency (whether or not items on sale can be returned), exchange leniency (whether customers earn cash back or store credit for returns) and monetary leniency (if the full worth of the item is returned to the customer or not).

In looking at 22 academic papers on the topic of return policies, Janakiraman and his team found that return policies with monetary rewards are most likely to increase consumer purchases. In addition, businesses looking to reduce the number of returns should relax restrictions such as scope or exchange leniency.

Although it is commonly believed that more lenient return policies increase purchases, Janakiraman warns that businesses should be cautious of being too lenient. “This meta-analysis shows that retailers may be better served by creating more complex return policies that vary along multiple dimensions instead of just a few.”

Joining the UTA faculty in 2012, Janakiraman has long studied the impact of effort and deadlines on consumer purchase and returns. His work focuses on understanding the psychology of a consumer’s reaction to their retail understanding.

regions: Dallas

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