Assessing the Impact of Product and Service Quality on Consumer Returns: A Data Analytics Study

This study contributes to the understanding of consumer return behavior by examining the association between in-store customer shopping experiences during purchases and subsequent returns. Return rates across stores within the same company can vary significantly. We empirically examine this variation with respect to product quality and service quality. Using over 21 million purchase and return transactions and nearly 26,000 customer satisfaction survey responses from a national jewelry retailer, we conduct a detailed analysis using a multilevel probit regression model. Our analysis reveals managerially relevant findings for retailers. We demonstrate that service quality during a purchase may have even greater influence than product quality on returns. We also find that a salesperson perceived to be highly competent may be associated with increased returns. Further, our empirical results suggest a retailer may overcome the negative effect of low competence salespeople on returns by enhancing store environment

Information:  Dr. M. Schmidt, tel. 82199, e-mail: schmidt2@rsm.nl