The challenge of remanufactured products: the role of returns policy and channel structure to reduce consumers’ perceived risk

Purpose – While remanufactured products represent an increasingly researched phenomenon in theliterature, not much is known about consumers’ understanding and acceptance of such products. This studyexplores this issue in the context of the theory of perceived risk (TPR), investigating return policy leniency anddistribution channel choice as potential factors to foster remanufactured products’ sales.Design/methodology/approach – This research utilizes an experimental design composed of a pre-test anda scenario-based main experiment to explore how return policy leniency might mitigate consumers’ perceivedrisk and how their related purchase intention differs across two types of retail distribution channel structures(i.e. brick-and-mortar vs. online).Findings – The investigation into the efficacy of return policy leniency within two retail distribution channelsettings (i.e. brick-and-mortar vs. online) illustrates that providing a lenient return policy is an effective “cue” inincreasing consumer purchase intention for remanufactured products. While prior literature has establishedthat consumers value return policy leniency for new products, the authors provide empirical evidence that thispreference also applies to remanufactured products. Notably, that return policy preference holds true in bothchannel settings (i.e. brick-and-mortar vs. online) under consideration. Additionally, and contrary to theauthors’ predictions, consumers perceived remanufactured products sold via both channel settings as equallyrisky, thus highlighting that both are appropriate distribution channels for remanufactured products. Finally,while research on new products provides some initial guidance on consumer perceptions of quality and risk, thestudy provides empirical evidence into the difference of perceived risk with regard to new versusremanufactured products.Originality/value – By employing the TPR, this research explored the role played by two supply chainmanagement related factors (returns policy and channel structure) in reducing consumer’s perceived risk andincreasing purchase intention. In doing so, this study answers the call for more consumer-based supply chainmanagement research in a controlled experimental research setting.