Return policies in the apparel industry

Abstract

The objective of this master's thesis was to examine the impact of various incentives on consumers' decision to return products in the Norwegian market, as well as the resulting effects of return decisions on the performance of apparel retailers. The objective of the study was to investigate the factors that influenced consumers' decisions regarding product returns, and to analyze the subsequent effects on the performance and logistical challenges faced by apparel retailers.

From the literature review the concepts of lenient return policy (LP), strict return policy (SP), practices, return decision (RD), performance and satisfaction, the author identified three independent variables and two depended variables to what he expected would influence return decision and if return decision influenced performance. The three independent variables were lenient return policy, strict return policy and practices. The two dependent variables were return decision and performance. Four hypotheses were developed to explain the dependent variable. Data collection for this master thesis was done with a survey where the hypotheses were tested with a path analysis.

The findings from this research show that practices had a positive influence on return decision and return decision had a significant positive impact on performance. The independent variables lenient return policy and strict return policy had a negative impact on return decision. Based on the findings, the paper discusses that managers should focus on internal integration and improve their logistical operations to be more cost effective and enhance customer satisfaction. This paper also argues this could by achievable by changing the leniency or the strictness of the apparel retailers return policy