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- W968645324 abstract "A partial-refund policy is superior to a full money-back policy when a seller faces a significant amount of opportunistic return behavior-i.e., consumers order a product for short term usage only to return it for a refund later. In a partial-refund policy, the seller charges a rent (the nonrefundable portion of price) to those who return the product; this discourages opportunistism, but also penalizes consumers who only return because merchandise is unsatisfactory. The optimal partial refund policy balances this tradeoff. Profit is higher under the partial refund policy because of a lower number of returns and because a higher price can be charged. Mail-order clothing and personal computer industries demonstrate that catalogers typically offer only partial refunds. We thank Kevin Sadeghian and Michal Gerstner for their contributions to the empirical part of this paper. Wujin Chu would like to thank the Institute of Management Research at Seoul National University for sponsoring part of this research. Seoul Journal of Business" @default.
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- W968645324 date "1998-01-01" @default.
- W968645324 modified "2023-09-26" @default.
- W968645324 title "Partial Refunds or Money-Back Guarantees ?" @default.
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