Can Product Returns Make You Money? Harvard Case Solution & Analysis

Numerous business see clients' product returns as a significant trouble and an eroder of revenues. The authors' own research study extended these researches by checking out the trade-offs in between the expenses of product returns - especially when clients consider such experiences acceptable -and their long-lasting advantages to the business.

Evaluating 6 years of purchase, product-return and marketing-communications information from "Company 1" a big nationwide brochure seller that offers garments and devices - they validated that overlooking product return habits, or even attempting to dissuade it straight by not marketing to clients who return items (such as by not sending them brochures), would be an error. In a field experiment with a 2nd brochure seller, "Company 2," which offers shoes, clothing and other devices through the Internet and mail-order brochures, the authors discovered that under a lax product-return policy, clients' purchases, caused recommendations and revenues were higher than under a rigorous policy (which restricts and prevents product returns).

PUBLICATION DATE: April 01, 2010 PRODUCT #: SMR353-HCB-ENG

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