When does transparency matter for consumers’ circular decisions? Visibility and traceability in closed-loop supply chains

Markets are increasingly demanding greater supply chain transparency, yet this remains a significant challenge for many companies. Understanding what type of information to disclose and the timing of disclosure across the customer journey represents a key decision for companies, particularly when the information pertains to circular initiatives, such as those involved in closed-loop activities. This study, grounded in signaling theory, explores the effect of disclosing closed-loop supply chain information on consumers' intentions. We selected consumers as our unit of analysis for the active role they can play when referring to companies' closed-loop initiatives, such as purchasing recycled products or participating in take-back programs. To test the hypotheses, we conducted two scenario-based experiments with consumer participants, followed by a post-hoc experimental analysis and a post hoc qualitative study with managers to further discuss and validate the findings. The primary aim of the studies is to operationalize supply chain transparency through its visibility and traceability components in a closed-loop supply chain context. A second objective is to examine the effectiveness of transparency in closed-loop supply chains, analyzing how the two components influence consumer outcomes across different phases of the customer journey. Our findings demonstrate a positive indirect effect of the joint visibility–traceability disclosure on participation intention through consumers’ attitudes toward the take-back initiative, whereas the hypothesized effects on purchase intention are not supported. The study contributes to the growing literature on supply chain transparency by extending signaling theory to closed-loop supply chain contexts and offering insights for managers on strategic investments in transparency.