September 2010
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410 Reads
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168 Citations
Journal of Business Research
In two studies, we investigate the interrelationship between return policy leniency and retailer quality. In the first study, we content analyze the return policies of e-tailers randomly selected from those listed at BizRate.com. Then we relate the return policy characteristics to these quality ratings. Consistent with signaling theory, we find that as the ratings of e-tailer quality increase, return policy leniency increases in non-consumable product categories. However, the positive quality/return policy leniency relationship does not hold in consumable product categories. In a follow-up experiment, we investigate how consumers interpret the return policy signal. Specifically, we find that consumers' ability to control their shopping experience and their general trust of e-tailers moderate their reactions to return policies that differ in leniency. Finally, we discuss the theoretical and managerial implications of this research.