Returns policies

Pasternack,B. (1985). Optimal pricing and returns policies for perishable commodities. Marketing Science, 4, 166-176. 

A first step might be to categorize service or effort activities into transactional and informational types. Transactional service describes those aspects that are not meaningful to a customer who does not complete the purchase transaction in that channel. Examples include a fast checkout process or a lenient return policy. Informational service, such as activities that educate customers about the brand or product, can be consumed separately from the product. Informational service is obviously the type that is susceptible to free riding. 

Davis, S, M. Hageity, and E. Gerstner, Return Policies And Optimal Level Of Hassle, Journal of Economics and Business, 50, 5 (1998), 445-460. 

Pasternack, B.A., Optimal Pricing And Returns Policies For Perishable Commodities, Marketing Science 4, 2 (1985), 166-176. 

Order-routine specification - the buyer negotiates the final order, listing the technical specifications, the quantity needed, the expected time of delivery, return policies, warranties, etc... 

The evaluation factors used most frequently are price, quality, and delivery. Other possible factors would be production capacity and flexibility, technical capabilities and support, information and communication systems, financial status, innovation and R D, corporate social responsibility (CSR), safety awareness, political stability, cultural congruence with the buyer, and terrorism risk. Other frequently used factors include organization structure, training and development policies, performance history, reputation, amount of past business, warranties and claim policies, procedural comphance, and return policies. 

Pasternack, Barry A. Optimal Pricing and Return Policies for Perishable Commodities. Marketing Science (1985) 4, 166-176. 

In 1932, Viking Press was the first book publisher to accept returns. Today, buyback contracts are common in the book industry, and publishers accept unsold books from retailers. To minimize the cost associated with a return, retailers do not have to return the book, only the cover. When publishers can verify retailer sales electronically, nothing must be returned. The goal in either case is for the publisher to get proof that the book did not sell while reducing the cost of the return. Over the years, considerable debate has taken place about the impact of publishers returns policy on profits in the industry. Our discussion provides some justification for the approach taken by the publishers. 

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