An Analysis of Consumers' Propensity to Return in E-Retailing

Abstract

The B2C (Business to Consumer) market in Taiwan is obviously becoming a noticeable market. As the market grows and matures, “return” becomes one of the challenges for e-retailers. In the past, most of the literature on return issues focused on the wholesaler-retailer relationship. Recently, due to the advent of Internet-based retailing within the past decade, attention is shifting to the issue of returns in the retailer-consumer relationship. In this study, empirical data is used and a decision tree model is implemented to analyze the critical variables revealing the customer return propensity. There are three dimensions of variables in the data set: customer demographic variables, merchandise variables and service variables. Three variables, namely, category, price and delivery days could be used to distinguish customer return propensity more effectively. In accordance with these variables, some strategies for website managers are proposed to control returns in e-retailing.