Product Return Behavior of Modern Retail Consumers

Modern retailers use return policy to create customer satisfaction. This paper analyzes the return behavior of consumers in Bangkok metropolis which includes surrounding urbanized provinces. The ordered logit model and questionnaire survey data from 400 samples were used. The analysis reveals that most of the respondents had incorrect understanding of the return policy conditions. Almost three-fourths of the consumers received defective products or were dissatisfied with product quality; these were mostly found in electrical appliances from hypermarkets. The consumers decided to exchange or return the products within 7 days after purchase. The exchange/return procedure usually takes 30 minutes or less but most consumers found the exchange/return process difficult. Most chose to exchange for new items without making additional purchase. The analysis shows that the following factors had a positively effect on the probability of product exchange/return: 1) travel frequency to modern retailers, 2) knowledge of the return policy, 3) perceived information on the return policy prior to the purchase, 4) frequency of experiencing product defect and unsatisfactory product quality, and 5) travel expenses incurred in exchanging/returning products. The government should regulate retailers to provide correct and clear return policy information. The retailers should procure from reliable suppliers to reduce the incidence of defective products. The retailers should develop a better logistics and improve on the product return database.