Return Strategies of Competing E-Sellers: Return Freight Insurance vs. Return Pickup Services
Over the past decade, return freight insurance (RFI) and return pickup services (RPSs) have emerged as dominant return service strategies in e-commerce, particularly in China’s competitive online retail market. Despite their prominence, the strategic dynamics guiding e-sellers’ choice between these...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2025-01-01
|
| Series: | Mathematics |
| Subjects: | |
| Online Access: | https://www.mdpi.com/2227-7390/13/2/296 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832588072132280320 |
|---|---|
| author | Qiyuan Li Yanli Fang Yan Chen |
| author_facet | Qiyuan Li Yanli Fang Yan Chen |
| author_sort | Qiyuan Li |
| collection | DOAJ |
| description | Over the past decade, return freight insurance (RFI) and return pickup services (RPSs) have emerged as dominant return service strategies in e-commerce, particularly in China’s competitive online retail market. Despite their prominence, the strategic dynamics guiding e-sellers’ choice between these services remain underexplored. This study develops a game-theoretic model to analyze the equilibrium return strategies of two horizontally competing e-sellers with varying misfit probabilities. By examining four subgames, we identify the conditions under which e-sellers converge on either RFI or RPSs. Our findings revealed that highly similar or highly differentiated products typically favor RFI due to intense price competition or reduced need for service-based competition, while moderately differentiated products lead to RPS adoption as service quality becomes a key competitive lever. Additionally, competitive pressure often drives e-sellers to adopt homogenized return strategies, particularly RPSs, to maintain market position. The equilibrium outcomes are shaped by misfit probability differences, consumer hassle costs, and cost structures, offering actionable insights into optimizing return strategies in competitive e-commerce environments. These findings provide actionable insights into optimizing return service strategies in competitive e-commerce environments and contribute to the growing literature on return policies as a competitive lever in online retail markets. |
| format | Article |
| id | doaj-art-8a09d5f23c4b4fa5b7b48eee115c73cc |
| institution | Kabale University |
| issn | 2227-7390 |
| language | English |
| publishDate | 2025-01-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Mathematics |
| spelling | doaj-art-8a09d5f23c4b4fa5b7b48eee115c73cc2025-01-24T13:40:04ZengMDPI AGMathematics2227-73902025-01-0113229610.3390/math13020296Return Strategies of Competing E-Sellers: Return Freight Insurance vs. Return Pickup ServicesQiyuan Li0Yanli Fang1Yan Chen2Department of Decision Sciences, Macau University of Science and Technology, Macau 999078, ChinaSchool of Mathematics and Statistics, Huizhou University, Huizhou 519007, ChinaDepartment of Decision Sciences, Macau University of Science and Technology, Macau 999078, ChinaOver the past decade, return freight insurance (RFI) and return pickup services (RPSs) have emerged as dominant return service strategies in e-commerce, particularly in China’s competitive online retail market. Despite their prominence, the strategic dynamics guiding e-sellers’ choice between these services remain underexplored. This study develops a game-theoretic model to analyze the equilibrium return strategies of two horizontally competing e-sellers with varying misfit probabilities. By examining four subgames, we identify the conditions under which e-sellers converge on either RFI or RPSs. Our findings revealed that highly similar or highly differentiated products typically favor RFI due to intense price competition or reduced need for service-based competition, while moderately differentiated products lead to RPS adoption as service quality becomes a key competitive lever. Additionally, competitive pressure often drives e-sellers to adopt homogenized return strategies, particularly RPSs, to maintain market position. The equilibrium outcomes are shaped by misfit probability differences, consumer hassle costs, and cost structures, offering actionable insights into optimizing return strategies in competitive e-commerce environments. These findings provide actionable insights into optimizing return service strategies in competitive e-commerce environments and contribute to the growing literature on return policies as a competitive lever in online retail markets.https://www.mdpi.com/2227-7390/13/2/296online retailingcustomer returnsreturn freight insurancereturn pickup servicecompetitive retailers |
| spellingShingle | Qiyuan Li Yanli Fang Yan Chen Return Strategies of Competing E-Sellers: Return Freight Insurance vs. Return Pickup Services Mathematics online retailing customer returns return freight insurance return pickup service competitive retailers |
| title | Return Strategies of Competing E-Sellers: Return Freight Insurance vs. Return Pickup Services |
| title_full | Return Strategies of Competing E-Sellers: Return Freight Insurance vs. Return Pickup Services |
| title_fullStr | Return Strategies of Competing E-Sellers: Return Freight Insurance vs. Return Pickup Services |
| title_full_unstemmed | Return Strategies of Competing E-Sellers: Return Freight Insurance vs. Return Pickup Services |
| title_short | Return Strategies of Competing E-Sellers: Return Freight Insurance vs. Return Pickup Services |
| title_sort | return strategies of competing e sellers return freight insurance vs return pickup services |
| topic | online retailing customer returns return freight insurance return pickup service competitive retailers |
| url | https://www.mdpi.com/2227-7390/13/2/296 |
| work_keys_str_mv | AT qiyuanli returnstrategiesofcompetingesellersreturnfreightinsurancevsreturnpickupservices AT yanlifang returnstrategiesofcompetingesellersreturnfreightinsurancevsreturnpickupservices AT yanchen returnstrategiesofcompetingesellersreturnfreightinsurancevsreturnpickupservices |