Flexible Return Policies Can Lead to Fewer Returns

At a Target in downtown Los Angeles, Lauren Ireland exchanged a gift at the return counter just a few days before Christmas. She’s not the only one, either. Asked if a store’s return policy matters to her, she said, of course.

“I won’t buy it if I know I can’t return it,” she said. 

Stacy Wood, Langdon Distinguished Professor of Marketing at the NC State Poole College of Management, has conducted research on the topic of store return policies.

“Here’s what happens, here’s the mechanism: when consumers see a liberal return policy it’s a signal to them, a cue, that the retailer is standing behind their products,” she said. “What happens is that there’s this tricky little psychological bias that we all fall prey to, which is called confirmatory bias. And what happens is that we tend to view evidence in a way that confirms our prior expectations.”

Read the full story published by Marketplace.org.