Return Policies in Distribution Channels

Title:  Return Policies in Distribution Channels


Speaker: Liu Yunchuan (University of Illinois at Urbana-Champaign, Associate Professor)


Host: Xu Jiayan (Sun Yat-sen UniversityLingnan College, Assistant Professor)


Date and Time:14:30-16:00  May 22, 2018


Location: MBA 701


Language: English+Chinese


Abstract:Many retailers and manufacturers adopt the practice of accepting product returns from consumers (via money-back guarantee) and retailers (via full-credit returns policy) respectively. While the extant literature focuses on either the manufacturer’s or retailer’s returns policy, this paper investigates both returns policies and finds that the manufacturer’s returns policy can actually induce the retailer’s returns policy by increasing the retailer’s salvage value for consumer returns. However, counter to the intuition that an increasing salvage value is always beneficial for retailers, the manufacturer’s returns policy is not necessarily beneficial for competing retailers. Nonetheless, the manufacturer’s returns policy can benefit the manufacturer even when competing retailers face a certain demand before sales, which is in sharp contrast to the extant literature. We also show that a high quality retailer can be more likely to accept returns than a low quality retailer.


About the speaker: Prof. Yunchuan (Frank) Liu holds a Ph.D. in marketing from Columbia University. He currently teaches marketing research (undergraduate) and pricing strategy and tactics (MBA) in College of Business. His research focuses on distribution channel management, pricing strategy, retailing, and advertising. Prof. Liu's works have been published in top-tier academic journals including Marketing Science and Management Science. Prof. Liu served on the editorial board of Marketing Science. He is also active as a reviewer for various journals in Marketing and Economics.

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