Research On Retailer's Return Policy Based On Freight Insurance

In recent years,with the popularity of the internet,the number of people using the internet for shopping has been increasing,and online shopping has won people's love for its convenience and affordability.However,as the customer experience of online shop-ping lags behind the customer purchase decision-making seriously.Therefore,online shopping returns occurs frequently,which also brings many complaints and disputes.Freight insurance arises at the historic moment.Freight insurance greatly reduces the disputes caused by returns,and attracts more customers to buy products.But it may also lead to more product returns,resulting in loss of online retailers.So the main issue of this study is whether online retailers should buy freight insurance and whether it is always beneficial for retailers.Our thesis regard maximizing retailers' profit as a goal,establish two different return policy models considering both sales price and return price,one is the freight insurance is not considered,and the other is the retailer purchases the freight insurance for the customer.It analyses how the salvage value of return,return cost and freight insurance affect the retailer's return policy.Finally,a comparative analysis of the two return policy models was conducted,and the conclusion is drawn.Taking S-store as an example,the data of S-store is substituted into the model,which provides a reference for the decision-making of S-store.The conclusion shows:for retailers,choosing to buy freight insurance for cus-tomers is not always better than that of not considering freight insurance.It is related to the salvage value of returns,the cost of returns and freight insurance.When the salvage value of return is less than a critical value,the return policy without freight insurance is always better than that with freight insurance.When the salvage value is greater than the critical value,choosing to purchase freight insurance for customers may be better than that without considering freight insurance,which is related to the salvage value of returns,the return cost and the freight insurance.When freight insurance is very smal-1,it is advantageous for retailers to choose to buy freight insurance for customers.If the price of freight insurance is more expensive,it is more advantageous for retailers to choose a policy without considering freight insurance.