“Free returns can increase online purchases by 357 percent” reports NBC News, based on research by Associate Dean for the B.S. in Commerce Program and Professor James “Trey” Maxham and co-researcher Amanda Bower from Washington & Lee University. The study, “Return Shipping Policies of Online Retailers: Normative Assumptions and the Long-Term Consequences of Fee and Free Returns,” was conducted with two leading online retailers using surveys and customer spending data. It showed that when customers received free shipping on returned items, their purchases over the next two years increased by between 58 and 357 percent. When they had to pay for shipping, their subsequent purchases decreased significantly. The research is a call for online retailers to consult their customer data to determine any effects of return shipping costs on customer relationships and purchases.

Read coverage of Maxham’s research:

NBC News
Science Daily
Business News Daily
WMRA Virginia Insights
Washington & Lee University
MIT Sloan profile of the 2010 working paper

-Source: McIntire School of Commerce News