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EMAC 2024 Annual


Flagging Frequently Returned Products under Consumer Information Processing
(A2024-119646)

Published: May 28, 2024

AUTHORS

Sergey Turlo, Goethe University Frankfurt

ABSTRACT

Online retail has grappled with high product return rates, a problem exacerbated by industry leaders like Amazon due to their lenient return policies, setting a norm in consumer expectations. Despite a wide range of interventions aiming to provide consumers with comprehensive product information, the challenge persists, imposing significant burdens on retailers and the environment. This article questions Amazon's recent proposal to label "frequently returned items" as a strategy to encourage deeper consumer engagement with product information. With an analytical model focusing on costly pre-purchase consumer information processing, this article demonstrates how flagging frequently returned products might reduce information processing by consumers, leading to increased return rates. It also proposes alternative interventions to increase consumer information processing and identifies avenues for future empirical investigations.