Preventive Product returns Management Systems - a Review and Model

Intense competition among online retailers and high customer expectations drive product returns, which eat into online retailers’ profits. Thus, online retailers need to find ways to reduce return rates without causing a concomitant decrease in sales. Using a grounded theory approach which combines literature-based insights and in-depth qualitative interviews with managers from major online retailers, the authors propose a framework for understanding the antecedents of the decision to implement a product returns management system (PRMS). In addition, the framework considers three types of preventive instruments online retailers employ to reduce product return rates as well as moderators of the linkage between the decision to implement a PRMS and the chosen instruments type. The authors conclude with a brief discussion of future research directions.