Study On Return Policy Of Online Retailers Under Return Time Restriction

As the development of information technology, the Internet has already been an essentialpart of personal work and life. The Internet has taken high-tech applications intoproductivity. E-business activities will greatly improve the efficiency of production andliving. The rapid growth e-commerce has become an integral part of all kind of economicactivities. Online shopping gradually replaces the traditional shopping mode. People whoare staying at home can easily enjoy shopping online. The network technology of B2Ce-commerce has brought enormous real-life benefits to consumers. At the same time, thelag distribution system also makes an active role in B2C e-commerce is difficult to be fullyexploited.The rapid developing B2C e-commerce also brings a problem which online merchantsand consumers can not ignore as the network’s own limitations and specificity, the returnedproblem. No matter how specific the online product information can be described,consumers are unable to understand the actual value of the product. Consumers choose toreturn produces when there is a gap between the expectation of consumer products and theactual value of the product or goods in the logistics and distribution process have beenbroken. So the return rate in B2C e-commerce market is far higher than that in traditionalmarket. For this situation, online retailers developing a reasonable return policy plays avital role on the development of enterprises.Based on the above-mentioned background, we get the research contents after reviewingrelated research at home and abroad. In this paper, we research on the online retailers’return policies based on the B2C e-commerce environment. Consideration to the threefactors which are refund amount, return time limit and return cost, we established themodel with the retailers profit maximization objective function. Then we analyze thevarious factors on the influence of the retailers. At the same time, correspondingsuggestions are put forward in view of the influence coefficient. We further analysis howgenerous return policy can be provided when the retailers’ revenue expenditure is inbalance. So we hope we can provide retailers some references for them to develop thereasonable return policy.We have drawn the relevant conclusions, in particular to the following aspects:1) theconsumer can accept higher price for the first time when the retailer can provide the longer return period;2) a partial refund strategy is better than a full refund, and the best refund isequal to the second best selling price minus the average cost of a single returned product;3)we have drawn the maximum returns under the revenue expenditure balance. Finally, thesimulation study was conducted sensitivity analysis for each parameter variables, derivedthe greatest impact on the retailers’ profit factor, in order to provide online retailers a basisfor decision making on how to reduce return rates.