The faster, the better? The impact of short delivery times on product returns in online retailing

Abstract

This study explores the impact of short delivery times on product returns in the context of online retailing. Using a large dataset from a global fashion retailer's U.S. e-commerce platform, we investigate whether fast deliveries characterized by below-average delivery times influence the likelihood of product returns. The analysis employs logistic regression to examine the relationship between delivery times and return rates, and additionally considers product characteristics and customer attributes. Our findings indicate that fast deliveries lead to a significant increase in the likelihood of returns, particularly among new customers. Insufficient post-purchase cognitive dissonance reduction may theoretically motivate this counterintuitive result as also indicated by a preliminary follow-up study reported in the online appendix. These insights challenge the prevalent assumption that the shortening of delivery times unequivocally benefits online retailers and customers, highlighting the need for a balanced management approach to order fulfillment that considers both benefits in terms of customer acquisition and downsides in terms of return costs.