Can Product Returns Make You Money Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Many companies see customer product returns as a major inconvenience and eroder profit. But recent studies have begun lighting the potential benefits of allowing customers to return products with impunity. This study finds that, when a company has a mild product return policy that allows customers to return almost any product at any time, customers are more willing to make other purchases, thereby increasing the company's revenues from sales. Our studies of these studies extended by examining a compromise between the cost of product returns, especially when customers consider such experiments satisfactory and long-term benefits for the company. Analyzing six years of purchase, return the product and marketing data from the "Company 1", a major national retail catalog, which sells clothing and accessories, they have confirmed that ignoring the withdrawal behavior, or even trying to discourage him not directly marketing to customers who return products (such as by not sending their catalogs), it would be a mistake. In fact, managers should take the product back on client behavior and offer them a satisfactory experience. In the experiments with the second retail catalog, "Company 2", which sells shoes, apparel and other accessories via the Internet and mail-order catalogs, the authors found that the soft-product return policy, customers' purchases, and induced earnings calls was greater than under strict policy (which prevents and limits the return of product). These measures may be raised even further through a catalog mail strategy that takes into account the expected future profits from each customer, and the relationship between purchases and product return behavior, that is, through the optimal allocation strategy. "Hide
by Andrew Petersen, in Kumar Source: MIT Sloan Management Review 7 pages. Publication Date: April 1, 2010. Prod. #: SMR353-PDF-ENG