E-tailer׳s return policy, consumer׳s perception of return policy fairness and purchase intention

• The importance of e-tailer׳s return policy to consumer behavior.
• Return depth is positively related to consumer׳s perception of fairness and purchase intention.
• E-tailer reputation and perceived competition moderate the effect of return depth, respectively.

While e-commerce is growing, returns are proving to be a major problem for e-tailers (i.e. internet retailers). We argue that e-tailers׳ return policies play a strategic influence on consumer behavior. Specifically, we focus on the effect of return depth - full return policy (FRP) vs. partial return policy (PRP) – on consumer׳s perceived fairness of return policy and purchase intention. Using a structural equation model (SEM), we empirically show that an e-tailer׳s return depth has a positive influence on the consumer׳s perceived fairness of the return policy and purchase intention. Further, e-tailer׳ competition and its reputation significantly moderate the relationships between the return policy depth and the perception of the return policy׳s fairness and purchase intention. Finally, we discuss the theoretical and managerial implications of our results.