Mitigating The Impact of Purchase Uncertainty on Reverse Supply Chain Through Impulsive Consumer Buying with Moderation of Lenient Return Policies

Abstract

E-commerce has drastically changed consumers’ purchase behaviour towards impulsive ordering of products and retailers’ leniency in return policies. This tendency has contributed to escalating product returns and higher retailer costs due to reverse logistics. This study explores how product uncertainties, stemming from perceived product quality and promotional discounts in customer’s online purchases, affect the financial performance of the reverse supply chain for an online retailer in a developing-country context. A quantitative approach is employed to survey 590 online retail managers and customers from different backgrounds using non-probability convenience sampling. The findings show that heightened product uncertainty drives impulsive buying when combined with liberal return policies that further increase the handling costs of returns. The study’s outcome underscores the need for retailers to balance customer satisfaction with efficient reverse logistics, emphasizing strategies such as improved product descriptions and careful management of discounts to mitigate impulsive shopping and reduce returns. This study provides insights into the dynamics of customers’ purchases and firm’s return policies to the stakeholders striving to manage reverse supply chain operations and improve financial performance in the highly competitive digital marketplace.