Who Should Pay for the Returns Product? The Effect of Transparency on Consumers’ Decision-making across the Reverse Supply Chain

The increasing volumes of consumer returns present a growing challenge for retailers, significantly impacting sustainability across all three dimensions of the triple bottom line: environmental, social, and economic. Concurrently, consumers are expressing increasing concerns about the environmental impact of returns. Given these concerns and the increasing involvement of consumers in logistics and supply chain management processes, it becomes imperative for retailers to consider empowering consumers as active decision-makers in the returns management process. Achieving this requires integration of consumers' decisions with a triple bottom line perspective, to align efficient returns management with an enhanced consumer experience. In this study, we investigate how transparency of returns' triple bottom line impact influences consumers' decision-making regarding returns. Drawing on the self-efficacy theory and the concept of psychological distance, we elucidate the social and psychological factors that drive consumer choices. We conduct a series of experiments to address our research questions. Our main study is informed by initial insights derived from a focus group method, followed by a series of complementary experiments, including both a scenario-based and a stated choice study. Our main contribution to the literature extends the existing knowledge on returns by examining the context of consumer decision-making about returns through the lens of psychological mechanisms. Furthermore, our research offers practical insights for retailers by illuminating the alignment of sustainable business goals with an optimal consumer experience in the realm of returns.