How Retailers’ Recommendation and Return Policies Alter Product Evaluations

This research investigates the interactive effects of retailers’ recommendations and return policies on consumers’ post-purchase evaluations of products which yield a mixed attribute performance. This article presents an account of the consumers’ post-purchase product evaluation process, in which counterfactual thinking plays a central role. Two studies show that consumers’ post-purchase evaluations of products, which yield a mixed attribute performance, tend to be more favorable under lenient return policies than under restricted return policies when retailers offer recommendations during the pre-purchase decision-making process, but more favorable under restricted return policies than under lenient return policies when retailers offer no recommendations.

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► Retailers’ recommendations and return policies affect consumer behaviors.
► We study how they affect evaluations of products that yield mixed performances.
► Lenient return policies are preferable when recommendations are offered.
► Restricted return policies are preferable when no recommendation is offered.
► The differences in counterfactual referent recruitment mediate the effects.