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Article 1 – a cross-national service strategy to manage product returns: E-tailers’ return policies and the legitimating role of the institutional environment
This study examines the drivers of product return–related customer behavior across Western
and Eastern cultures. This study uses two surveys and one experiment to investigate that. The
results across the two countries show varying patterns for product return behavior and a
uniform pattern for repurchase intention. Return policies that imply high effort restrictiveness
decrease product returns in Western, but not in Eastern cultures, while the perceived
customer-oriented institutional environment increases product returns in Eastern, but not in
Western cultures. For repurchase intention, we find that effort restrictiveness in both
cultures decreases repurchases intention, while the perceived customer-oriented institutional
environment increases repurchase intention. We also find self-interest and legitimacy are
responsible for the effect of perceived institutional environment, this was neglected for a long
time.
Product return policies differ in the degree of restrictiveness (vs. leniency) on different
dimensions, which can be organized in three categories:
- Effort restrictiveness (effort): refers to the difficulty of the return policies
- Time restrictiveness (time): specifies the return deadline
- Refund restrictiveness (money): reflects the refund constraints of the product returns
The institutional environment also had three pillars:
- Regulative pilar: regulates people’s behavior by setting rules and laws (what must
(not) be done)
- Normative pilar: guides socially obligated behavior based on values and norms
(what should (not) be done)
- Cognitive pilar: refers to taken-for grated behavior grounded in a shared
understanding and common beliefs
Western cultures are dominated by an individual value orientation: people do not feel an
obligation to others. In Eastern cultures people are concerned with maintaining harmonious
relationships, and they want to be good and respectful as well as doing the right thing.
Customer oriented norms may foster product returns among Easterners because they
primarily lean on a moral authority for this confrontational behavior. Westerner’s product
return decisions may be driven by e-tailers’ effort restrictiveness because Westerners rely on
their own judgment, not on external authorities.
,Hypothesis 1: Culture moderates the relationship between effort restrictiveness and product
return behavior, such that effort restrictiveness decreases product returns among Western but
not among Eastern customers.
Regarding effort restrictiveness, the results reveal a significant negative main effect on the
return rate, while the interaction effect with country is not significant.
Hypothesis 1 is not supported according to study 1.
Conditional effects analyses show that effort restrictiveness decreases the return rate in the
United States but not in China, supporting Hypothesis 1 according to study 2.
Hypothesis 2a: Culture moderates the relationship between perceived customer-oriented
norms and product return behavior, such that perceived customer-oriented norms increase
product returns among Eastern but not among Western customers.
The results for customer-oriented norms reveal no significant main effect but a significant
positive interaction effect. Conditional effect analysis sheds further light on the significant
interaction: Customer-oriented norms increase the return rate in the Chinese sample but not in
the U.S. sample. Hypothesis 2a is supported according to study 1.
For customer-oriented norms, the results reveal no significant main effect on the return
rate but a significant positive interaction effect with country, supporting hypothesis 2a
according to study 2. Of the covariates, product return experience has a positive effect on the
return rate, and we observe a positive effect for the country variable.
Hypothesis 2b: The effect of perceived customer-oriented norms on product return behavior
among Eastern customers is serially mediated by self-interest and legitimacy.
A closer inspection of the significant indirect effect in China shows a significant positive
effect of customer-oriented norms on self-interest, a significant positive effect of self-interest
on legitimacy and a significant positive effect of legitimacy on the return rate, supporting
Hypothesis 2b according to study 2.
Hypothesis 3: Effort restrictiveness decreases repurchase intention among Western and
Eastern customers. (Is supported)
The results for effort restrictiveness show a significant negative main effect on repurchase
intention and a significant positive interaction with country. Inspecting the conditional effects
shows a significant negative effect of effort restrictiveness on repurchase intention in both
countries, which tends to be stronger in the U.S. than in the Chinese sample. Thus,
Hypothesis 3 is supported according to study 1.
Regarding the repurchase decision, the results reveal a significant negative main effect of
effort restrictiveness on repurchase intention while the interaction effect with country is not
significant, supporting Hypothesis 3, according to study 2. For customer-oriented
regulations, the results reveal a significant positive main effect and a significant positive
interaction effect. Conditional effects analyses reveal a positive effect of customer-oriented
regulations on repurchase intention in both countries, which tends to be stronger in China
than in the United States. Thus, Hypothesis 3 is supported.
The results reveal a significant negative main effect of effort restrictiveness on repurchase
intention, while its interaction with country is not significant, supporting Hypothesis 3.
, Hypothesis 4a: Perceived customer-oriented regulations increase repurchase intention among
Western and Eastern customers.
Regarding customer-oriented regulations, we observe a positive main effect but no
significant interaction, supporting Hypothesis 4a according to study 1. Of the covariates,
product return attribution increases repurchase intention. Furthermore, a negative effect of the
country variable is observed.
For customer-oriented regulations, there is a significant positive main effect, but no
significant interaction effect, supporting Hypothesis 4a according to study 2.
Hypothesis 4b: The effect of perceived customer-oriented regulations on repurchase
intention is serially mediated by self-interest and legitimacy.
Explanation: In particular, consumer risk research shows that using experience as a
guidance for future behavior is one of the most pivotal risk-coping strategies used for
consumer decisions (Mitchell and McGoldrick 1996). Given that risk aversion is a
characteristic that has been shown to exist cross-culturally, Easterners and Westerners alike
should base their repurchase decisions on effort restrictiveness. Customer protection
intuitions help reduce perceived risk, which is linked to customers’ self-interest.
Hypothesis 4b suggests a serial mediation for both cultures: “customer-oriented
regulations → self-interest → legitimacy → repurchase intention”. The results reveal a
significant serial indirect effect. Specifically, we observe a significant positive effect of
regulative institutions on self-interest, a significant positive effect of self-interest on
legitimacy, and a significant positive effect of legitimacy on repurchase intention,
supporting Hypothesis 4b according to study 2.
Study 1 (Hypothesis 1, 2a, 3, 4a)
Purpose: Study 1 was carried out to provide initial evidence that Westerners and Easterners
respond differently to e-tailers’ effort restrictiveness and perceived institutional
environment when deciding on a product return but uniformly when deciding on a
repurchase.
Results: Study 1’s results largely support the hypotheses. For the return decision, we find a
negative main effect of effort restrictiveness.
- This finding is in line with our assumption that a troublesome return process
decreases returns in Western countries— yet we find no significant differences across
the studied countries (Hypothesis 1), probably due to the student sample.
- All other hypotheses are supported. As proposed, we find a significant interaction
effect for customer-oriented norms (Hypothesis 2a), with Easterners feeling
empowered to return products when perceiving intense competition, while Westerners
do not.
- Furthermore, the results support the detrimental effect of effort restrictiveness on
repurchase intentions in West and East (Hypothesis 3).
- Finally, we find the proposed culturally uniform effect of perceived customer-oriented
regulations (Hypothesis 4a): In both cultures, strong customer protection institutions
empower customers to consider a repurchase after a dissatisfying shopping episode.
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