Full Refund Research Articles

How retailers can gain more profitability driven by digital technology: Live streaming promotion and blockchain technology traceability?

Live streaming in e-commerce often faces challenges like counterfeit products and high return rates. To mitigate this issue, retailers can adopt blockchain technology for product traceability to enhance consumer trust, i.e., blockchain-traceable products may be sold in live streaming. Our paper presents three analytical models under various return policies to explore how live streaming and blockchain technology interact in e-commerce. Retailers can invest in live streaming with influencers to attract consumers and in blockchain technology to reduce product returns, benefiting from a demand-enhancing effect and a price-enhancing effect, respectively. The retailer’s investment strategy between live streaming and blockchain technology depends on the interactions of these two effects, moderated by the retailer’s budget type, the market commission level of live streaming, and the traceability cost of blockchain technology. For budget-constrained retailers, live streaming and blockchain technology act as substitutes. When the commission level is low (high) and the traceability cost is high (low), the demand-enhancing (price-enhancing) effect dominates the price-enhancing (demand-enhancing) effect, thus the retailer invests in live streaming (blockchain technology) as a substitute for blockchain technology (live streaming). Conversely, for budget-unconstrained retailers, they may act as complements, prompting investment in both when commission levels and traceability costs are low. The retailer does not invest in either when both the commission level and traceability cost are high. We extend our results to a full refund policy to show the robustness of our result and find that it reduces the retailer’s incentive to invest in live streaming or blockchain technology.

Managing consumer bracketing purchases: Optimal return policy analysis

This paper investigates the optimal pricing and return policies of an online retailer selling a product with multiple versions to consumers facing valuation uncertainty. Consumers resolve their uncertainty through bracketing, a practice wherein they purchase multiple versions with the intention of keeping the best fit and returning the rest. By establishing a Stackelberg game between the retailer and consumers, we investigate two return policies: one offering full refunds with purchase limits, and the other offering partial refunds (Q or R) under exogenous and endogenous pricing (N or P), yielding four scenarios: NQ, PQ, NR, PR. Our study provides key insights into optimal return policies for retailers, demonstrating that stringent return policies may not necessarily be more profitable compared to lenient ones when dealing with consumer bracketing. In the case of exogenous pricing, retailers providing convenient returns are better off charging return fees, while those facing cumbersome returns should offer full refunds under certain conditions. When jointly leveraging pricing, retailers have the flexibility to choose between the full-refund and partial-refund policies. We obtain several interesting findings. First, as the mismatch probability increases, retailers tend to charge higher return fees in Scenario PR, while adjusting optimal decisions (i.e., refund under the partial-refund policy and purchase limit under the full-refund policy) non-monotonically in other scenarios. Second, consumers receive nonnegative expected utility in the exogenous pricing scenario, whereas zero in the endogenous pricing scenario. Third, when returns become sufficiently convenient, retailers adopting the partial-refund policy under endogenous pricing shift toward offering full refunds. In addition, when considering heterogeneous consumers, we discover that in some cases, retailers can benefit from consumer bracketing.

Returns on complex bets: evidence from Asian Handicap betting on soccer

PurposeThe Asian Handicap is a way to bet on soccer matches where payouts depend on an adjustment to the score that favors the weaker team. These bets can feature the possibility of all or half the bet being refunded and this makes the calculation of their expected return more complex than for traditional betting on a home win, away win or draw. We examine the behavior of odds in this market.Design/methodology/approachIn addition to a using well-known publicly available source of information on Asian Handicap betting odds – which provides the average odds across a range of bookmakers – we have also sourced a large dataset of Asian Handicap odds offered by an individual bookmaker.FindingsWe show that bettors systematically lose more money on Asian Handicap bets where refunds are not possible than when it is possible to obtain a half refund. We also show that bets with the possibility of a full refund have the lowest loss rates. We demonstrate that this pattern of differences in loss rates across bets is predictable based on the odds quoted. This pattern could represent preferences, with gamblers disliking bets featuring potential refunds, but we argue the evidence points more towards gamblers incorrectly calculating expected loss rates.Originality/valueDespite being one of the world's largest betting markets, there has been almost no previous research on the properties of the Asian Handicap soccer betting. Our finding of clear differences in returns on simultaneously available bets on the same team is also a new anomaly previously undocumented in any research on sports betting.

Optimal decisions for selling on an online group buying platform in a competitive fuzzy game environment

Online group buying platforms (OGBPs) as a new form of e-commerce, offer a new channel for vendors to provide discounts on assorted services through promotion, and attract new customers with the opportunity to experience their services. This paper is conducted based on genuine issues observed in OGBPs where a vendor decides to advertise its service by offering a discount coupon on an OGBP. Accordingly, we propose a fuzzy, dual-channel supply chain, with one OGBP and one vendor who sells her/his service through both offline and online channels. Considering the cognitive uncertainty of parameters in a supply chain, all parameters of the problem are specified as fuzzy variables based on experts’ opinions. This paper develops a demand function of online customers depending on online and offline prices, sales period on the OGBP and vendor's credibility. The vendor's credibility is also affected by service level and advertisements. Furthermore, in the competitive OGB market, two game structures, i.e., a centralized model and a decentralized model called as OGBP-leader Stackelberg, are considered under different refunding and revenue sharing scenarios of unredeemed coupons. By comparing these scenarios, the purpose of this paper is to examine the optimal approach for OGBP’s pricing strategy and vendor’s decisions. Expected value models are developed to evaluate how members decide commission price, online price, service quality, and sales period of a service in each scenario. According to the results, the vendor or OGBP that provide a full refund to the customers maximizes the expected profits compared to No-refund policy; sharing the entire revenue from the coupons sales with the vendor increases the commission price. This increases the online price and reduces the quality, sales period and expected profits; the vendor's generosity, meaning providing a refund to customers and earning revenue from redeemed coupons, is in favor of both the vendor and OGBP; and we investigate the impact of quality and credibility factors under a fuzzy environment on optimal profits.

Optimal Pricing and Advertisement Policy for an Advance Order Booking Inventory System with Order Cancellation under Inflationary Condition

The e-commerce business has grown significantly over the past few years, mainly due to providing a better customer experience through advance booking and order cancellation options with a full refund. In this paper, the inventory control problem of a firm that offers advance booking for the product and cancellation (with a full refund) before the due delivery date is addressed. A profit maximization model is formulated to find the optimum inventory cycle length, the selling price of the product, and advertisement expenditure. The discounted cash flow approach is used to take into account cash flows at different time points. Advance booking is made at the beginning of the inventory cycle at a discounted price until the time of stock arrival, followed by usual spot sales. The number of order cancellations during the advance booking period is dependent on the waiting time for receiving the order. The impact of revenue collected through advance sales is considered by including interest earned. Product demand is assumed to be the function of advertisement expenditure and the selling price of the product. A solution procedure is suggested, and the model is illustrated through numerical analysis, thereby providing valuable managerial insights based on the results obtained.

Clocking in or Not? Optimal Design of a Novel Gamified Business Model in Online Learning

Clocking-in cash-back (CIC), an emerging gamified business model in online learning, has recently garnered significant attention. CIC allows users to secure a full refund of the course fee through consecutive completion of specific tasks within a required time window. These tasks, known as clocking in, encompass activities such as daily assignments and sharing progress updates on social media. By employing this gamification system, the firm effectively monitors user efforts, categorizing them as winners or quitters based on clocking-in completion. In this paper, we examine how a firm should set the optimal time window for its course and how the time window is affected by context-specific factors. We identify two opposing effects associated with extending the time window on users’ quitting time: the psychological disutility increasing effect (negative) and the effort cost decreasing effect (positive). Our results indicate that, as quitters’ positive word-of-mouth effects increase, there are cases in which the firm should opt for shortening the time window. Additionally, we find that, as the marginal content creation cost rises, the firm may find it more advantageous to raise the difficulty level by shortening the time window. Our findings provide valuable insights that online learning firms can utilize to enhance their design of the CIC mechanism.

LEGAL PROTECTION OF CONSUMERS IN HOME ORDER LETTER (SPR) FROM THE DEVELOPER

The initial process of buying a house at a developer company is carried out with a House Order Letter (SPR) and the consumer is immediately given a receipt for the purchase of a house unit. In its implementation, this SPR uses standard clause agreements which are more detrimental to consumers. In the course of this credit agreement, preceded by an SPR from the developer company, it became a thing that was detrimental to the community who had paid the receipt and was canceled unilaterally by the developer company on the grounds that the bank refused to apply for a mortgage. In this case, legal protection is needed for consumers to get a full refund of what they deposited because the unilateral cancellation has been carried out by the Developer Company. Business actors as parties who make agreements use standard clauses that tend to release, transfer or reduce their responsibilities which should be the responsibility of business actors, by violating Article 18 paragraph (4) UUPK, so that in general, consumer rights are still not protected because business actors are concerned with the fulfillment of protection for their parties against the risks they may face. The SPR agreement does not conflict with applicable law but its moral responsibility is required to protect consumers.

Surviving the Post Silicon Valley Bank Crisis

In the wake of the sudden collapse of three major financial institutions in the United States (Silicon Valley Bank, Silver Gate, and Signature Bank) the Federal Government intervention was swift and quick and even surpassed regulations by promising a full refund for all bank depositors, yet was the major intervention by the Government and the United States President Joe Biden a sign of strength or weakness? This study analyzes the importance of the financial sector to achieve economic prosperity as well as the readiness of the United States Government to face future challenges that might jeopardize the entire international financial system through alarming World Bank Data.

Large-scale sports events, sports gambling market and promotion risk management: Theoretical model and case analysis based on option hedging theory.

Large-scale sports events have become a good opportunity for major enterprises to promote due to their high social attention; however, they also force enterprises to confront the risks of uncertainty and extreme loss. During the 2018 Russia World Cup, Vatti Co., Ltd.'s promotion activity "If France Wins, Get a Full Refund" suffered double losses economically and reputationally due to France's victory and the company's failure to fulfill its promise. This paper uses option hedging theory, and the risk management tools to construct a risk management model. Case analysis and program improvement were carried out. The research results show that using the winning odds can effectively control the risks. Companies should determine their promotion plan based on sale returns and the maximum implicit income generated by promotional activities. The research paper opens a new field using derivative financial instruments to control corporate promotion risks.

Generation Z, tourism and hospitality: the legacy of COVID-19

PurposeAs Generation Z (Gen Z) represents one of the most important segments in the travel and tourism sector, the present work aims to analyse Gen Z's behaviour in a post-pandemic scenario. In particular, the present work deepens the factors that may influence future accommodation choices.Design/methodology/approachThis study uses data from a web-based questionnaire targeting Italian tourists belonging to Generation Z, reaching 221 complete responses. After the statistical analysis of the sample, an exploratory factor analysis (EFA) was then carried out.FindingsData provided evidence about the main factors affecting Gen Z tourist choices. In particular, these young consumers are positively influenced by the information (especially from institutional and verifiable sources), more flexible purchase terms (e.g. full refund in case of cancellation due to contagion of the coronavirus disease 2019 (COVID-19) and digital payments) and structure features (e.g. cleanliness, sanitisation, digitalisation and sustainability).Originality/valueThis work attempts to contribute to the academic literature by looking at the tourism experience from Gen Z's perspective. From this angle, this work underlines the influence some factors exert on the final accommodation choice, especially in the presence of exogenous events. Moreover, as this study focusses on a post-pandemic scenario, the study seeks to provide valuable indications, both at the theoretical and managerial level, for the tourism sector to boost the sector's recovery and prepare the sector to face similar events.

The impact of greater VAT tax neutrality on total factor productivity: Evidence from China’s VAT credit refund reform in 2018

Prior to 2018, Chinese enterprises registered for Value Added Tax (VAT) were required to carry forward excess input tax credits indefinitely. Following the 2018 VAT Credit Refund Reform, enterprises became entitled to refunds on excess input tax credits, as is standard in a conventional VAT system. The reform significantly enhanced tax neutrality, which might have been expected to have impacted production efficiency. This study employs a difference-in-differences (DID) method of analysis, using the commencement of the 2018 reform as the focal point, to highlight how from 2014 to 2020 certain Chinese enterprises received fiscal benefits from the reform while others did not. The conclusion is striking; enterprises that were able to obtain VAT refunds increased their total factor productivity by 6.96% compared to those that received no fiscal benefit from the reform. The outcome reflects the impact of the VAT credit refund as a source of financing for these firms, leading directly to increased investment, or, in the case of high-tech enterprises, increased R&D. The impact of this change is particularly pronounced in private enterprises and growing businesses. Our study provides evidence of the benefits of VAT reform in the direction of neutrality by providing swift and full refunds for excess input tax credits.

Improving supply chain transparency with blockchain technology when considering product returns

AbstractBlockchain technology is commonly used in many industries. One current application is that providing supply chain transparency, sellers can disclose product information to consumers for authentication and certification. To examine the supply chain blockchain based transparency‐level strategy and its interact with different refund policies, in a two‐echelon supply chain, we consider a supplier decides on the transparency level and wholesale price, and a retailer decides on retail price and provides full refund (policy F), or partial refund (policy P), or no refund (policy N) policy to consumers. We find the refund policy choice and the transparency‐level strategy have a mutual influence. A lenient refund policy (a higher refund) can generate more demand, which makes the supplier to provide a high transparency level, whereas a high consumer's transparency awareness also promotes the retailer to choose a more lenient refund policy. We find Pareto improvement exists under a cost‐sharing strategy, and the retailer is willing to share part of the adoption cost only when the efficiency of improving the transparency level is moderate. Otherwise, the retailer adopts blockchain technology only when there is no cost sharing. Further, different shipping cost bearers can change the sensitivity of refund policy choice, and the supplier prefers to provide a high transparency level when the retailer covers the shipping cost. When the retailer becomes more socially responsible, the supplier is more willing to provide a higher transparency level, and the retailer is more willing to provide a partial refund policy.

Value-added tax reform and service exports: Evidence from China

In 2012, sales tax was replaced in China with value-added tax (VAT). This study evaluates the effect of this change on service exports. VAT reform was introduced across provinces and service sectors at different times. Hence, our paper identifies the impacts of VAT reform on firms’ export behavior by utilizing a difference-in-difference (DID) estimation methodology and finds that VAT reform significantly increases service exports in intensive and extensive margins. The export-enhancing effects are larger for non-state-owned enterprises and firms of larger scale and higher productivity levels. VAT reform alleviates tax magnification and double taxation and effectively promotes the competitiveness of China's service exports. With the complete implementation of VAT reform, alongside the full refund of VAT on exported products, China's service exports would increase by approximately two-and-a-half times.

Мисселинг как современный инструмент недобросовестных продаж банковских продуктов и услуг в коммерческих банках

Introduction. Misseling has become a problem for commercial bank customers today. Misseling can be found both in large credit institutions and small banks. Formally, this is not a violation of the law, but, in fact, misleading of the client. In fact, there is a bank fraud when selling a banking product or service. Despite the fact that this phenomenon can be found in almost any bank to varying degrees of participation, from a scientific point of view it has not yet been sufficiently studied, although recently the Bank of Russia has made an attempt to regulate this process legislatively. Theoretical analysis. The article analyzes the concept of “misseling” and its place in the technique of unfair sales of banking products and services in commercial banks. Modern types of misseling are distinguished: unfair information, related sales, opaque pricing, sale of unsuitable products, product substitution. Empirical analysis. It was revealed that the number of misseling cases in the banking sector in the analyzed period increased, one of the reasons was a significant reduction in the key rate after its high value, low level of the population’s financial literacy. Against the background of a significant decrease in complaints related to investment life insurance, there was an increase in complaints related to cumulative life insurance, as well as the number of all other complaints on various topics. Results. The directions of improvement on encountering misselling by the Bank of Russia, commercial banks and clients are formulated and described. One of these areas was the introduction of new rules for the sale of financial products by the Bank of Russia. If the Central Bank of the Russian Federation detects a violation on the part of a commercial bank, it has the right to issue an order to the financial institution to suspend the sale of the product until the problems are eliminated. In some cases, the Bank of Russia may oblige the bank to buy back from customers all products sold in violation and make a full refund.

Extraordinary and Unavoidable Circumstances in Tourism under COVID-19 and Post Pandemic Times—Casus Poland as Example of Sustainability Management

The views expressed in this paper are those of the authors and should not be taken as reflecting the position of any authority, entity or institution. This article presents the legal status as of 25 June 2022. In accordance with the Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements, amending Regulation (EC) No 2006/2004 and Directive 2011/83/EU of the European Parliament and of the Council and repealing Council Directive 90/314/EEC, tour operators registered in Poland are required to refund payments to travelers in the case of cancellation of their travel package due to extraordinary and unavoidable circumstances within 14 days of its termination. The traveler has the right to terminate the package travel contract before the start of the trip without paying any termination fee in the event of unavoidable and extraordinary circumstances occurring at the destination or its immediate vicinity and which significantly affect the implementation of the package or the transport of passengers to their final destination. In the case of termination of the package travel contract due to unavoidable and extraordinary circumstances, the traveler is entitled to a full refund of any payments made for the package travel but is not entitled to any additional compensation. The tour operator makes the return within 14 days from the effective termination of the travel contract. In the article we will describe the situation during the COVID-19 pandemic and post-COVID times. The significance and implications of our findings and arguments show how important this is in designing a state’s tourism policy. Targeted aid can be designed well in advance of extraordinary and unavoidable circumstances. In our opinion and the opinions of business practitioners, extraordinary and unavoidable circumstances in tourism occur on average every ten years, e.g., the1992 Yugoslavia war, 2001 attack on the World Trade Center, 2010 Eyjafjallajökull volcanic eruption, and the 2020 COVID-19 pandemic. The results of the research show the effectiveness of legal instruments enacted by the Polish government during the COVID 19 crisis and the war in Ukraine. In the article we use two methods—empirical, related to the authors’ own experience, and dogmatic–exegetical. The empirical research was based on the authors’ experience as those responsible for the implementation of statutory regulations (director in the Ministry of Sport and Tourism and Ministry’s advisor) and on the concept of law as one of the normative systems in society—the operation of law in the sphere of social and economic life, which is tourism. A dogmatic–exegetical method was also used, which allowed for the study of the literature on the subject and the review of legal regulations. In our research, we also used the method of the economic analysis of law (law and economics method). Graphical presentation of the research results and the impact of the introduced support mechanisms on supply and demand indicate the desirability of solutions in this area.

Optimal decisions in a remanufacturing supply chain under money‐back guarantees

AbstractThis study establishes a remanufacturing supply chain (RSC) consisting of a manufacturer and a retailer, in which the retailer offers a money‐back guarantee (MBG) with a full refund for consumers, and investigates the pricing decisions in four remanufacturing cases by considering the quality of returns. Our results show that controlling remanufacturing costs can enable both members to achieve a win–win situation in most remanufacturing cases. When the consumer's acceptance level for remanufactured products is low (high), a high return rate of non‐defective returns losses (benefits) the retailer's profit but does not losses the manufacturer's profit.

Optimal Return Policy of Competitive Retailers’ Pre-Sale Products Based on Strategic Consumer Behavior

Because of incomplete information on pre-sold products, consumers face uncertainty about the value of what they have purchased, which leads to a mismatch between supply and demand and a large number of returns. By developing appropriate return policies and effectively managing and handling consumer returns, retailers can not only reduce waste but also ensure better resource utilization, which is essential for sustainable development. In this paper, we analyze the full-refund and full-and-freight-refund policies of retailers and develop a game model based on binary competition for selecting the optimal return policy for the pre-sold products of two retailers. The study shows that when both retailers have low capacity, there is no pre-sale stage. However, when their combined capacity is high and exceeds the demand of non-strategic consumers, equilibrium depends on their combined capacity and the proportion of strategic consumers who choose to keep the pre-purchased product under both return policies. When the number of strategic consumers who retain pre-order products is low under the full-refund policy and both retailers have moderate capacity, equilibrium is achieved when an asymmetric return policy is followed rather than a symmetric return policy. Specifically, when the percentage of strategic consumers who keep their reserved products under the product return strategy is small and the capacity of the two retailers is moderate, the maximum benefit is achieved if one of the retailers adopts the policy of a full refund and the other adopts the policy of a full-and-freight refund. Otherwise, when one retailer adopts the policy of a full refund or a full-and-freight refund, its competitor should adopt the same strategy to gain maximum revenue. The research on retailers’ pre-sale and return strategies in this paper helps to optimize the operational strategies and operational processes of e-retailers, further improve the management and decision making of their joint pre-sale and return strategies, and help optimize retailers’ profits.

A game-theoretic approach for pricing in a closed-loop supply chain considering product exchange program and a full-refund return policy: a case study of Iran.

The increasing rate of manufacturers and consequently the production of the products gave rise to an increase in used products. The growth in old goods, as well as their negative environmental and social consequences, prompted supply chain operators to focus more on reverse logistics for collecting and reusing these items. However, there are a few key issues that should be handled in this manner, covering how to implement an effective collecting plan. What categories of used items should be collected? And how should they be handled for the aim of reusing them? To address these questions, the pricing issues are investigated in a CLSC with a manufacturer and two retailers. As an effective collection strategy, the first retailer, along with selling new products, benefits from the product exchange program (PEP). In this program, the retailer, by offering two types of discounts on a new product’s price, is able to collect two types of products, including those without and with useful lifetime left as the first- and second-category products, respectively. In terms of used products management, the first-category products are sent to the manufacturer for recycling, and the second-category ones are sold as second-hand products by the first retailer. Besides, the first retailer exercises a full refund return policy, where the returned defective products, after being remanufactured by the manufacturer, are sold to customers by the second retailer in the secondary market. With respect to buy back price of first-category products from the first retailer, two scenarios are considered: 1) the manufacturer pays as much as the difference between the original retail price and discounted retail price in order to encourage the retailer to offer exercise the PEP for returned used items, or 2) by considering the discount on wholesale price, the manufacturer pays as much as the difference between the original wholesale price and discounted wholesale price. In this study, a real-world case study is considered based on an Iranian automotive industry to understand the issue better and obtain practical results. The findings show that the second scenario is more profitable due to lower selling prices and greater demand rates. It is proved that the PEP along with providing environmental benefits can improve supply chain financial profit even for the first or the second-category products.

On the introduction of return window to supply chains with online channel

In the E-commerce era, many firms offer return policy in the form of return window, allowing consumers to return for a full refund within a specific time, which has an important effect on supply chain operations. Motivated by practical observations, we explore a supplier’s distribution channel strategy when introducing return window in both centralized and decentralized supply chain systems. A game-analytical model is developed to study the interaction between channel strategy and return window. The equilibrium channel strategies, return windows, and prices in the two systems are derived. We find that a long return window always tends to be offered by the supplier when the direct channel is open (in a dual-channel or single direct-channel strategy) since it expands potential market demand. Also, the supplier provides a shorter return window in the decentralized than the centralized system as the existence of double marginalization, which enriches existing results. We prove that introducing return window always restricts the supplier to choose a dual-channel strategy, but it incentivizes (restricts) the supplier to choose a single retail-channel strategy in the decentralized (centralized) system in response to changing cost pressures. Our theoretical findings provide insights for managing supply chains when introducing return window as a market strategy.

A study on pre-charging strategy for appointment scheduling problem with no-shows

No-shows of customers are common in many appointment-based service systems that often cause severe idling and underutilization of capacity. This paper studies a new strategy that pre-charges customers for a deposit to lock up appointments, which differs from previous studies on overbooking strategies that reserve more appointments than its capacity to hedge against the loss of revenue due to customer no-shows. Moreover, the new strategy is more favorable in practice because it improves the satisfaction and loyalty of customers in the long-term running. We analyze two versions of the pre-charge strategy including (i) offering a partial or full refund for cancellation (to-refund policy), and (ii) offering no refund for cancellation (no-refund policy). We consider two settings of the appointment scheduling problem including a static setting in which appointment decisions are made at the beginning of the day, and a dynamic setting in which appointment decisions are made sequentially within the day. The two settings are formulated by an analytic model and a Markov decision process model, respectively. The analytical results reveal that the pre-charging strategy is consistently more profitable than the overbooking strategy even for a fully refundable deposit case, and the to-refund policy can be more profitable than the no-refund policy. Moreover, we show that the profitability of the to-refund policy continues to hold in a dynamic setting in which the service capacity is limited, the arrivals are dynamic, and the report of cancellation is uncertain. Finally, we implement a series of numerical experiments based on real data in the context of managing patient appointments for a large clinic and demonstrate the managerial implications.