IDEAS home Printed from https://ideas.repec.org/a/pal/jorapm/v23y2024i2d10.1057_s41272-023-00435-9.html
   My bibliography  Save this article

Retail pricing, cashback and refund decisions in a supply chain with e-shop and direct channels

Author

Listed:
  • Ata Allah Taleizadeh

    (University of Tehran)

  • Alireza Mahmoudzade Varzi

    (University of Tehran)

  • Hadi Akbarzadeh Khorshidi

    (The University of Melbourne
    The University of Melbourne)

  • Mahsa Noori-daryan

    (University of Tehran)

Abstract

In this research, we are trying to design a model using incentive policies in a supply chain in which a store can sell either directly or through cash-back websites. The cash-back website returns a percentage of the paid price to the customer by sending a special link, created by this website based on the incentive policy. Although the extent of the impact of these websites on the sale rate, empirically or theoretically, is still uncertain, we know that this policy can have a positive impact on the online shopping and there are many customers who are sensitive to the price. The store’s website, in addition to the incentive policies, considers refund. Empirically, the refund policy provides a psychological comfort for customers. The use of incentive policies usually attracts more customers, but on the other hand, it reduces profits. The main purpose of this study is to examine the impact of the use of incentive policies and how these policies apply to the e-shop and other players in supply chain. Another goal of this study is to examine the behavior of the e-shop to create a cash-back website. This study examines the centralized and decentralized states.

Suggested Citation

  • Ata Allah Taleizadeh & Alireza Mahmoudzade Varzi & Hadi Akbarzadeh Khorshidi & Mahsa Noori-daryan, 2024. "Retail pricing, cashback and refund decisions in a supply chain with e-shop and direct channels," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(2), pages 140-163, April.
    • Handle: RePEc:pal:jorapm:v:23:y:2024:i:2:d:10.1057_s41272-023-00435-9
    DOI: 10.1057/s41272-023-00435-9
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41272-023-00435-9
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1057/s41272-023-00435-9?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Liu, Jian & Mantin, Benny & Wang, Haiyan, 2014. "Supply chain coordination with customer returns and refund-dependent demand," International Journal of Production Economics, Elsevier, vol. 148(C), pages 81-89.
    2. Christino, Juliana Maria Magalhães & Silva, Thaís Santos & Cardozo, Erico Aurélio Abreu & de Pádua Carrieri, Alexandre & de Paiva Nunes, Patricia, 2019. "Understanding affiliation to cashback programs: An emerging technique in an emerging country," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 78-86.
    3. Zhou, Yong-Wu & Cao, Bin & Tang, Qinshen & Zhou, Wenhui, 2017. "Pricing and rebate strategies for an e-shop with a cashback website," European Journal of Operational Research, Elsevier, vol. 262(1), pages 108-122.
    4. Arcelus, F.J. & Kumar, Satyendra & Srinivasan, G., 2007. "Pricing and rebate policies for the newsvendor problem in the presence of a stochastic redemption rate," International Journal of Production Economics, Elsevier, vol. 107(2), pages 467-482, June.
    5. Ballestar, María Teresa & Grau-Carles, Pilar & Sainz, Jorge, 2018. "Customer segmentation in e-commerce: Applications to the cashback business model," Journal of Business Research, Elsevier, vol. 88(C), pages 407-414.
    6. Ye Qiu & Ram C. Rao, 2020. "Increasing Retailer Loyalty Through the Use of Cash Back Rebate Sites," Marketing Science, INFORMS, vol. 39(4), pages 743-762, July.
    7. Ganesh Iyer & David Soberman & J. Miguel Villas-Boas, 2005. "The Targeting of Advertising," Marketing Science, INFORMS, vol. 24(3), pages 461-476, May.
    8. Wu, Jia-Jhou & Chang, Sue-Ting, 2020. "Exploring customer sentiment regarding online retail services: A topic-based approach," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    9. Pal, Brojeswar & Sana, Shib Sankar & Chaudhuri, Kripasindhu, 2012. "Multi-item EOQ model while demand is sales price and price break sensitive," Economic Modelling, Elsevier, vol. 29(6), pages 2283-2288.
    10. Martínez-López, Francisco J. & Feng, Changyuan & Li, Yangchun & López-López, David, 2022. "Using instant refunds to improve online return experiences," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    11. Rajiv Lal, 1990. "Improving Channel Coordination Through Franchising," Marketing Science, INFORMS, vol. 9(4), pages 299-318.
    12. Ballestar, María Teresa & Grau-Carles, Pilar & Sainz, Jorge, 2016. "Consumer behavior on cashback websites: Network strategies," Journal of Business Research, Elsevier, vol. 69(6), pages 2101-2107.
    13. Wang, Qinan & Chay, Yiowmin & Wu, Zhang, 2011. "Streamlining inventory flows with time discounts to improve the profits of a decentralized supply chain," International Journal of Production Economics, Elsevier, vol. 132(2), pages 230-239, August.
    14. Wong, W.K. & Qi, J. & Leung, S.Y.S., 2009. "Coordinating supply chains with sales rebate contracts and vendor-managed inventory," International Journal of Production Economics, Elsevier, vol. 120(1), pages 151-161, July.
    15. Lin, Hsin-Hui & Tseng, Timmy H. & Yeh, Ching-Hsuan & Liao, Yi-Wen & Wang, Yi-Shun, 2020. "What drives customers’ post-purchase price search intention in the context of online price matching guarantees," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    16. Terry A. Taylor, 2002. "Supply Chain Coordination Under Channel Rebates with Sales Effort Effects," Management Science, INFORMS, vol. 48(8), pages 992-1007, August.
    17. Wujin Chu & Preyas S. Desai, 1995. "Channel Coordination Mechanisms for Customer Satisfaction," Marketing Science, INFORMS, vol. 14(4), pages 343-359.
    18. Ata Allah Taleizadeh & Mahsa Noori-daryan & Reza Tavakkoli-Moghaddam, 2015. "Pricing and ordering decisions in a supply chain with imperfect quality items and inspection under buyback of defective items," International Journal of Production Research, Taylor & Francis Journals, vol. 53(15), pages 4553-4582, August.
    19. Arcelus, F.J. & Kumar, Satyendra & Srinivasan, G., 2008. "Pricing and rebate policies in the two-echelon supply chain with asymmetric information under price-dependent, stochastic demand," International Journal of Production Economics, Elsevier, vol. 113(2), pages 598-618, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ata Allah Taleizadeh & Alireza Mahmoudzade Varzi & Alireza Amjadian & Mahsa Noori-daryan & Ioannis Konstantaras, 2023. "How cash-back strategy affect sale rate under refund and customers’ credit," Operational Research, Springer, vol. 23(1), pages 1-69, March.
    2. Zhou, Yong-Wu & Cao, Bin & Tang, Qinshen & Zhou, Wenhui, 2017. "Pricing and rebate strategies for an e-shop with a cashback website," European Journal of Operational Research, Elsevier, vol. 262(1), pages 108-122.
    3. Lifeng Mu & Xin Tang & Vijayan Sugumaran & Wei Xu & Xiangyang Sun, 2023. "Optimal rebate strategy for an online retailer with a cashback platform: commission-driven or marketing-based?," Electronic Commerce Research, Springer, vol. 23(1), pages 475-510, March.
    4. Xu, Lina & Roy, Abhijit, 2022. "Cashback as cash forward: The serial mediating effect of time/effort and money savings," Journal of Business Research, Elsevier, vol. 149(C), pages 30-37.
    5. Ata Allah Taleizadeh & Mahsa Noori-daryan & Kannan Govindan, 2016. "Pricing and ordering decisions of two competing supply chains with different composite policies: a Stackelberg game-theoretic approach," International Journal of Production Research, Taylor & Francis Journals, vol. 54(9), pages 2807-2836, May.
    6. Chen, Jing, 2011. "Returns with wholesale-price-discount contract in a newsvendor problem," International Journal of Production Economics, Elsevier, vol. 130(1), pages 104-111, March.
    7. Hou, Xiyang & Li, Jianbin & Liu, Zhixin & Guo, Yongjiang, 2022. "Pareto and Kaldor–Hicks improvements with revenue-sharing and wholesale-price contracts under manufacturer rebate policy," European Journal of Operational Research, Elsevier, vol. 298(1), pages 152-168.
    8. Altug, Mehmet Sekip, 2016. "Supply chain contracting for vertically differentiated products," International Journal of Production Economics, Elsevier, vol. 171(P1), pages 34-45.
    9. Arcelus, F.J. & Kumar, Satyendra & Srinivasan, G., 2012. "The effectiveness of manufacturer vs. retailer rebates within a newsvendor framework," European Journal of Operational Research, Elsevier, vol. 219(2), pages 252-263.
    10. Kaya, Onur, 2011. "Outsourcing vs. in-house production: a comparison of supply chain contracts with effort dependent demand," Omega, Elsevier, vol. 39(2), pages 168-178, April.
    11. Afonso Vieira, Valter & Agnihotri, Raj & de Almeida, Marcos Inácio Severo & Lopes, Evandro Luiz, 2022. "How cashback strategies yield financial benefits for retailers: The mediating role of consumers’ program loyalty," Journal of Business Research, Elsevier, vol. 141(C), pages 200-212.
    12. Sule Birim & Cigdem Sofyalioglu, 2017. "Evaluating vendor managed inventory systems: how incentives can benefit supply chain partners," Journal of Business Economics and Management, Taylor & Francis Journals, vol. 18(1), pages 163-179, January.
    13. Harish Krishnan & Roman Kapuscinski & David A. Butz, 2004. "Coordinating Contracts for Decentralized Supply Chains with Retailer Promotional Effort," Management Science, INFORMS, vol. 50(1), pages 48-63, January.
    14. Christino, Juliana Maria Magalhães & Silva, Thaís Santos & Cardozo, Erico Aurélio Abreu & de Pádua Carrieri, Alexandre & de Paiva Nunes, Patricia, 2019. "Understanding affiliation to cashback programs: An emerging technique in an emerging country," Journal of Retailing and Consumer Services, Elsevier, vol. 47(C), pages 78-86.
    15. Liang Guo & Ganesh Iyer, 2013. "Multilateral Bargaining and Downstream Competition," Marketing Science, INFORMS, vol. 32(3), pages 411-430, May.
    16. Cai, Wenbo & Abdel-Malek, Layek & Hoseini, Babak & Rajaei Dehkordi, Sharareh, 2015. "Impact of flexible contracts on the performance of both retailer and supplier," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 429-444.
    17. Wang, Feng & Diabat, Ali & Wu, Lunwen, 2021. "Supply chain coordination with competing suppliers under price-sensitive stochastic demand," International Journal of Production Economics, Elsevier, vol. 234(C).
    18. Xing, Dahai & Liu, Tieming, 2012. "Sales effort free riding and coordination with price match and channel rebate," European Journal of Operational Research, Elsevier, vol. 219(2), pages 264-271.
    19. Yang, Shilei & Munson, Charles L. & Chen, Bintong, 2010. "Using MSRP to enhance the ability of rebates to control distribution channels," European Journal of Operational Research, Elsevier, vol. 205(1), pages 127-135, August.
    20. Nawel Amrouche & Ruiliang Yan, 2016. "A manufacturer distribution issue: how to manage an online and a traditional retailer," Annals of Operations Research, Springer, vol. 244(2), pages 257-294, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorapm:v:23:y:2024:i:2:d:10.1057_s41272-023-00435-9. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.