eThesis - School of Business electronic theses

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The innovativeness and competitiveness of online retailing has reshaped business activities. The market has grown hitherto its revenue rate cannot be compared with traditional retailing. Online retailing provides opportunities for e-retailers and customers who are physically distant to transact with each other. Therefore, the range of services offered by e-retailers has positioned the market to be more competitive than ever thought. This study aims in analysing and evaluating the possible impact of return policies on customer loyalty and satisfaction in an e-retailing environment. The return policies are capable of improving customer services to acquire repeated customer patronage and as well create long-term relationship that is essential for business growth. Loyalty is individual intention to repurchase products through a particular retailer. E-retailer must understand customer online shopping drivers in order to benefit from customer loyalty. Consumer satisfaction is measurable after product consumption by evaluating the discrepancy between expected product value and actual value.

Researchers have shown the importance and effect of reverse logistic in e- retailing. However, only few studies have focused on the impact of return policies on customer satisfaction and loyalty in e-retailing environment. Research questions are formulated to provide extensive and worthy findings on the research topic and provide information to the existing gap between e-retailer and customer loyalty sustenance. Based on our empirical study we analyse and discuss potential impacts of different return policies on customer satisfaction and loyalty. First, a conceptual framework was developed to formulate the research question in detail. The case companies' website information on return policies was used as our primary data, since it is exactly the same information that is given to their customers.

The findings revealed that e-retailers should design return policies that accept product return only for products which value can be recaptured. A product that has significantly lost value has the potential of increasing operating cost, if accepted for return and could negative affect profitability. Liberal return policy may contribute to the entire reverse logistics performance in retaining customers. Return policies that are positioned based on business strategy may have significant relationship with customer loyalty. The competitiveness, legislation and growth in e-commerce have forced e-retailers to have similar return policies designed to entice and retain customers. In conclusion, offering acceptable return policies can impact on customer satisfaction and generate customer loyalty.