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hubie [soylentnews.org] writes:

Cross-selling can help retailers avoid lost revenue from returns [utoronto.ca]:

It's become so darn easy to order stuff thanks to the miracles of online shopping. But it's not so simple on the retailer end, especially when more than 16 per cent of those sales are later sent back. In the U.S., that adds up to a staggering $816 billion in lost revenue.

Cross-selling can help, say a pair of researchers. Their experiments show that once we've chosen to buy something, we tend to consider that money as already spent or gone, also called "loss booking." If we decide we want to return the item, retailers can take advantage of that tendency by giving customers enticing options to spend their refund on something else, instead of getting their money back.

In a nutshell, "it hurts less to spend money refunded from a product return than other money, because you feel like you've already lost it," says researcher Chang-Yuan Lee, an assistant professor of marketing at the University of Toronto's Rotman School of Management.

[...] There's a catch though. The shopper has to psychologically mark the initial spend as lost, something that does not happen when they expect to ask for a refund at the time of purchase. Study participants who bought two pairs of shoes in different sizes, expecting to return the poorer-fitting pair, were not so likely to turn around and immediately apply the refund to something else offered.

[...] While consumers could be discouraged from making returns by being charged extra fees, that leaves a bad taste in their mouth and previous research has shown they may take their business elsewhere.

Do you typically want your money back, or do you find something else to spend it on?

Journal Reference:
Chang-Yuan Lee, Carey K. Morewedge, Mental accounting of product returns [open], Journal of Consumer Psychology, 2003. DOI: https://doi.org/10.1002/jcpy.1354 [doi.org]

Original Submission